Author Archives: TheAcsMan

Daily Market Update – June 9, 2016 (Close)

After 3 consecutive days higher, no doubt inspired by the lack of any clarity from Janet Yellen on Monday, the market was getting ready for a rest this morning and it stayed that way throughout the day, ending a 3 day winning streak.

As it did, the S&P 500 still sits only about 1% away from its all time closing high.

With the greatest likelihood that there will be no interest rate increase being announced next week and investors making it clear that they prefer that to be the case, even as they give some sign of accepting that increase, there isn’t much to hold the market back.

Except of course for that pesky thing that so many algorithms and traders use.

Charts.

Just as the 18000 level on the DJIA has been a barrier, so too is the 2137 level on the S&P 500.

People talk about triple tops and the bearish indicator that is, but after some failed attempts the DJIA did get beyond its 18000 level, although it has yet to do so convincingly. The same considerations lies ahead for the S&P 500.

With little economic news in the very near term, all we really have ahead is the FOMC meeting next week and then the usual events in the coming month of July.

At this point most everyone wants to see whether last week’s Employment Situation Report was simply an aberration and signifying nothing.

You can bet that if the next one, or even the GDP comes in big, there will be a big reaction.

It may still be a mystery, though, how traders would react.

With such bad news last week and the rumblings of that kind of a number being associated with a recession, some may find a strong higher number to be a major disappointment.

Who knows?

While I’m not trading, I am happy to see asset values climb, particularly as there is a rebound in oil and commodities.

Those led me down and now are leading me higher, but I wouldn’t mind getting out of some of those positions at this point and looking for a re-entry opportunity.

Otherwise, the week hinges on a sole position set to expire and hoping that it can still be rolled over and milking it for every last bit of premium until its own expiration.

With the Baker-Hughes Rig Count coming out at 1 PM tomorrow and with that single expiring position still being within range of both rollover and assignment, and maybe even expiration, I might be inclined to not wait to have the rig count take me out for the count.

Ultimately those premiums do add up, so I wouldn’t mind adding some more, but I would still much rather be actively exploring and opening new positions.

Still, money is money.

Daily Market Update – June 9, 2016 (7:30 AM)

After 3 consecutive days higher, no doubt inspired by the lack of any clarity from Janet Yellen on Monday, the market may be getting ready for a rest this morning.

As it does, the S&P 500 sits only about 1% away from its all time closing high.

Actually, just a shade less than 1%.

With the greatest likelihood that there will be no interest rate increase being announced next week and investors making it clear that they prefer that to be the case, even as they give some sign of accepting that increase, there isn’t much to hold the market back.

Except of course for that pesky thing that so many algorithms and traders use.

Charts.

Just as the 18000 level on the DJIA has been a barrier, so too is the 2137 level on the S&P 500.

People talk about triple tops and the bearish indicator that is, but after some failed attempts the DJIA did get beyond its 18000 level, although it has yet to do so convincingly. The same considerations lies ahead for the S&P 500.

With little economic news in the very near term, all we really have ahead is the FOMC meeting next week and then the usual events in the coming month of July.

At this point most everyone wants to see whether last week’s Employment Situation Report was simply an aberration and signifying nothing.

You can bet that if the next one, or even the GDP comes in big, there will be a big reaction.

It may still be a mystery, though, how traders would react.

With such bad news last week and the rumblings of that kind of a number being associated with a recession, some may find a strong higher number to be a major disappointment.

Who knows?

While I’m not trading, I am happy to see asset values climb, particularly as there is a rebound in oil and commodities.

Those led me down and now are leading me higher, but I wouldn’t mind getting out of some of those positions at this point and looking for a re-entry opportunity.

Otherwise, the week hinges on a sole position set to expire and hoping that it can still be rolled over and milking it for every last bit of premium until its own expiration.

Ultimately, those do add up, but I would still much rather be actively exploring and opening new positions.

Still, money is money.

Daily Market Update – June 8, 2016 (Close)

On Monday, Janet Yellen spoke and the market listened.

They tried listening a little bit more yesterday, but the words may have gotten too faint, especially by the final hour.

This morning, if looking to put a positive spin on things, the market wasn’t doing what if often has in the past few years.

It didn’t just reflexively go in the opposite direction. At least not yet.

This morning the futures were flat after having given up some decent gains yesterday, but when it’s all said and done, we were still within 1% of the all time high on the S&P 500.

By the closing bell today, we were even closer.

Granted, the level is still being sustained by a narrow foundation, but years from now all that anyone will know is what the level happens to be. Years after the fact, no one ever looks at the underlying causes of where the market stands unless there is some large move.

What can be said with some certainty is that not much is going on and maybe what we thought might be going on next week, now won’t happen.

Following last week’s Employment Situation Report there are now even those saying that a recession is possible.

The odds of that, according to JP Morgan economists of occurring in the next 12 months, is now considered larger than was the likelihood of an interest rate hike in June, just a week ago.

Maybe Yellen is right that we shouldn’t put too much emphasis on a single data point. After all, we could just as easily get big revisions next month or the month after, but that’s not how the universe of traders works. They focus on only the latest number and rarely look at the big picture. If one number takes you in one direction today and does so with conviction, no one should be surprised if the following data another conflicting number takes traders in a totally different direction.

Reverse the order of events and the outcomes are reversed as well, even as the net change may not be.

The individual investor is left hoping to be lucky, if deciding to capitalize on some economic news.

With the week now past the halfway point, it may simply end up as another week with little to nothing to show for it, in terms of active trading.

While no one expects any FOMC action next week, their words may still carry clout, so it may be difficult to commit in any meaningful way next week, either.

As far as that goes, if this week and next add to the previous week and just see asset values add to their levels while accumulating some dividends, I guess I can’t really complain.

But if I’m not trading, sooner or later someone is going to expect me to actually do something around the house and I can’t let that happen.

Daily Market Update – June 8, 2016 (7:30 AM)

On Monday, Janet Yellen spoke and the market listened.

They tried listening a little bit more yesterday, but the words may have gotten too faint, especially by the final hour.

This morning, if looking to put a positive spin on things, the market hasn’t done what if often has in the past few years.

It hasn’t just reflexively gone in the opposite direction. At least not yet.

This morning the futures are flat after having given up some decent gains yesterday, but when it’s all said and done, we are still within 1% of the all time high on the S&P 500.

Granted, the level is still being sustained by a narrow foundation, but years from now all that anyone will know is what the level happens to be. Years after the fact, no one ever looks at the underlying causes of where the market stands unless there is some large move.

What can be said with some certainty is that not much is going on and maybe what we thought might be going on next week, now won’t happen.

Following last week’s Employment Situation Report there are now even those saying that a recession is possible.

The odds of that, according to JP Morgan economists of occurring in the next 12 months, is now considered larger than was the likelihood of an interest rate hike in June, just a week ago.

Maybe Yellen is right that we shouldn’t put too much emphasis on a single data point. After all, we could just as easily get big revisions next month or the month after, but that’s not how the universe of traders works. They focus on only the latest number and rarely look at the big picture. If one number takes you in one direction today and does so with conviction, no one should be surprised if the following data another conflicting number takes traders in a totally different direction.

Reverse the order of events and the outcomes are reversed as well, even as the net change may not be.

The individual investor is left hoping to be lucky, if deciding to capitalize on some economic news.

With the week at the halfway point, it may simply end up as another week with little to nothing to show for it, in terms of active trading.

While no one expects any FOMC action next week, their words may still carry clout, so it may be difficult to commit in any meaningful way next week, either.

Daily Market Update – June 7, 2016 (Close)

Yesterday, Janet Yellen spoke and the market listened.

They tried listening a little bit more today, but the words may have gotten too faint, especially by the final hour.

What they heard was the Federal Reserve Chairman speak as if she had been a believer in the value of hedges.

Not that she was talking about any particular hedging strategies, she was just hedging any commitment by being all over the place.

Whatever she said was counter-balanced by something else that she said.

In essence, it was a perfect hedge.

She said that the economy was living up to expectations and that last week’s single point of data from the Employment Situation Report shouldn’t be projected forward.

At the same time she threw water on the idea that there was enough economic strength to consider an interest rate increase next week, although she didn’t really come out and say so.

What she did was to leave investors with the idea that the FOMC was still going to keep giving the gift of cheap money.

As a result, investors started buying and they did so through most of today, as well.

Clearly, traders prefer cheap money to a growing economy. As much as they may have given an indication of being ready to accept that increase, they surely would rather it not happen.

What they also didn’t seem to mind was an economic forecast that said that there was a 36% chance of a recession in the next 12 months.

So here we are, getting ready to now trade on a Wednesday morning and the S&P 500 sits barely 1% below its all time high after a small gain today..

I did nothing yesterday, nor today and am not certain that there is reason to do much tomorrow, although there are still some ex-dividend positions that I wouldn’t mind owning or adding to existing positions.

Otherwise, I don’t mind watching my asset values increase, even though it continues to be hard to understand why this is all happening.

More expensive energy prices, precious metals getting more expensive and no sign of the economy strengthening seems like an odd combination to move the market to new highs.

While maybe low interest rates gives some a reason to explore stocks, it seems like a strange thing to do when one is nearing its lows and the other its highs.