Monthly Archives: October 2016

Daily Market Update – October 5, 2016 (7:30 AM)

There really is very little reason for the market to do much of anything until Friday, when the Employment Situation Report is released.

That seems to be the case this morning, as it had the two previous mornings this week, although there were some times as trading ensued after the opening bell that the market seemed to forget what it was waiting to hear.

One thing that did become clear is that there are interest rate jitters.

Another thing that has been abundantly clear is that whoever is calling the shots and creating market unease about interest rates, just simply isn’t a student of history.

Instead of panic over the thought of a 0.25% interest rate hike, there should be concern that the economy can’t support even more, now that we’re approaching our 7th year of recovery.

But if those selling off at the mere thought of an interest rate increase would only look back in time, they would see that the early stages of rate increases are a great time to be accumulating stock.

That makes sense and for once, or maybe on just this rare occasion, something that makes sense had actually been the thing that had happened in the past.

That is, in the past, the early stages of interest rate increases reflected an expanding economy that was then reflected in the top and bottom lines of companies.

That in turn expanded earnings, which we all know is tied to a stock’s price, or at least should be.

Those are the very basic fundamentals upon which investing has always been based.

Maybe not trading, but investing.

So, even as we sit near new all time highs, there’s reason to think that an old fashioned expansion of the economy will lead us  even higher. Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

I tend not to think in terms of unbridled enthusiasm, but I would definitely like to add to my cash reserves to have an opportunity to pick up anything that may take a move lower, in anticipation of some sustained moves higher.

For now, I would just like to see some assignments of positions in October, stockpile some cash and then consider re-deployment as early as Election Day week, even as there could be a sell-off when the news of an interest rate increase does finally arrive.

Daily Market Update – October 4, 2016 (Close)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

This week looked as if it was going to pick up right where it had left off, not only by being a triple digit day, but in a reversal of course.

At the sounding of yesterday’s closing bell the course was reversed, but the streak was broken.

This morning’s futures gave no indication of anything as the trading was muted, as we draw nearer and nearer Friday’s Employment Situation Report.

The expectations for Friday are on the low side, only about 170,000 new jobs created, so a number with a 2 handle, especially if accompanied with an upward revision or two, could easily provoke a large reaction.

My guess is that reaction would be a negative one, even though once cool heads prevailed it should be seen as being something very positive.

The recent GDP release shows that something good is brewing in the economy and that would make it only a matter of short time until its reflected in both earnings and in guidance.

Maybe not in that order, but with spending cuts going on any increase to the top line should result in better comparable statistics and that is what it’s all about.

I went speculative yesterday with the sale of puts on a precious metal and was fortunate to get an opportunity to sell some calls on a long dormant position, that if ever assigned will still result in a nice return, thanks to the dividends and the accumulated premiums, even if one of the lots sold goes for $5 less than the purchase price.

While I still have some cash to part with, my expectation, just as that expectation was breached yesterday, is to be cautious and await Friday’s news.

There’s little else to capture attention this week other than any rallies that could give some additional opportunities to sell calls on dormant positions.

That would make the week worthwhile.

Today, however, the market really did show how unwilling it is to go gently into a higher interest rate environment as a fairly steep increase in rates today, partially due to some finite timetable Brexit news, sent stocks lower and really punished precious metals.

Unless there is some sustained news on the interest rate front between today’s close and Friday’s Employment Situation Report release, I suspect that today was a blip in both markets, but predictability hasn’t been the hallmark for what this market is likely to do on any given day.

Daily Market Update – October 4, 2016 (7:30 AM)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

This week looked as if it was going to pick up right where it had left off, not only by being a triple digit day, but in a reversal of course.

At the sounding of yesterday’s closing bell the course was reversed, but the streak was broken.

This morning’s futures give no indication of anything as the trading is muted, as we draw nearer and nearer Friday’s Employment Situation Report.

The expectations for Friday are on the low side, only about 170,000 new jobs created, so a number with a 2 handle, especially if accompanied with an upward revision or two, could easily provoke a large reaction.

My guess is that reaction would be a negative one, even though once cool heads prevailed it should be seen as being something very positive.

The recent GDP release shows that something good is brewing in the economy and that would make it only a matter of short time until its reflected in both earnings and in guidance.

Maybe not in that order, but with spending cuts going on any increase to the top line should result in better comparable statistics and that is what it’s all about.

I went speculative yesterday with the sale of puts on a precious metal and was fortunate to get an opportunity to sell some calls on a long dormant position, that if ever assigned will still result in a nice return, thanks to the dividends and the accumulated premiums, even if one of the lots sold goes for $5 less than the purchase price.

While I xstill have some cash to part with, my expectation, just as that expectation was breached yesterday, is to be cautious and await Friday’s news.

There’s little else to capture attention this week other than any rallies that could give some additional opportunities to sell calls on dormant positions.

That would make the week worthwhile.

Daily Market Update – October 3, 2016 (Close)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

There was, clearly, no theme last and no pattern.

This week will come to an end with a release of the Employment SItuation Report and there may be significant reason for the market to feel that it must react in a big way.

There was some hint last week that the market, although it had previously indicated that it would accept the idea of a December rate hike, wasn’t all that interested in really doing so.

The first bit of data to support the idea of an improving consumer led economy, the GDP, wasn’t well accepted, as it showed some surging consumer participation.

So this week’s Employment SItuation Report, if indicating a strong number or having upward revisions to the past, could be a real test.

With some cash freed up last week, I had money to spend, but just like the market, which was pointing toward a flat open this morning to start the week, I was and am still pretty tentative, at best.

With only 2 ex-dividend positions for the week and no positions set to expire, I wouldn’t have minded finding a place to park some money, but was planning to remain cautious.

At least in words, if not deeds, as it turns out I was anything but cautious in deeds.

Maybe caution will return tomorrow, but i was pretty satisfies with today.

With the start of the new quarter, we begin earnings season next week and we may finally get to that point that companies may find reason to start getting more optimistic as they provide guidance.

If looking for a catalyst to move higher, it has been a long time since fundamentals were responsible.

Otherwise, though, there’s really nothing else on the horizon that could give the market a reason to break old highs.

Again, I don’t expect to do much trading this week, especially after 2 trades this morning, but would gladly take any additional opportunities that might come along, especially if they helped to put some existing positions to work.

Daily Market Update – October 3, 2016 (7:30 AM)

Last week saw 5 days with triple digit moves, yet the market itself only ended with a net 0.2% gain.

There was, clearly, no theme last and no pattern.

This week will come to an end with a release of the Employment SItuation Report and there may be significant reason for the market to feel that it must react in a big way.

There was some hint last week that the market, although it had previously indicated that it would accept the idea of a December rate hike, wasn’t all that interested in really doing so.

The first bit of data to support the idea of an improving consumer led economy, the GDP, wasn’t well accepted, as it showed some surging consumer participation.

So this week’s Employment SItuation Report, if indicating a strong number or having upward revisions to the past, could be a real test.

With some cash freed up last week, I have money to spend, but just like the market, which is pointing toward a flat open this morning to stop the week, I’m pretty tentative, at best.

With only 2 ex-dividend positions for the week and no positions set to expire, I wouldn’t mind finding a place to park some money, but am going to remain cautious.

At least in words, if not deeds.

With the start of the new quarter, we begin earnings season next week and we may finally get to that point that companies may find reason to start getting more optimistic as they provide guidance.

If looking for a catalyst to move higher, it has been a long time since fundamentals were responsible.

Otherwise, though, there’s really nothing else on the horizon that could give the market a reason to break old highs.

Again, I don’t expect to do much trading this week, but would gladly take any opportunities that might come along, especially if they helped to put some existing positions to work.