Category Archives: Daily Market Update

Daily Market Update – October 5,  2015  (8:30 AM)

The last few weeks have been weeks of polar extremes. Not necessarily from one week to the next, but rather during the course of each individual week.

We’ve had the recent experience of opening weeks up very weakly or very strongly and then ending the week in just the opposite fashion.

Last week’s very impressive turnaround on Friday helped to end a consecutive streak of losing weeks and lifted the S&P 500 from being below that 10% correction line that we’ve been tethere4d to for the past 6 weeks.

This morning begins a week that really doesn’t have very much in the way of news. While FOMC Meeting Minutes are being released near the end of the week and another earnings season also begins near the end of the week, there’s little before that to get much attention.

Last week certainly had its ups and downs culminating with a very disappointing Employment Situation Report that really sent stocks in a freefall as they started Friday’s trading. That disappointment was related to the newfound belief that a rise in interest rates wouldn’t strangle the economy and was, instead, reflective of an improving economy.

So not getting that increase sent a message that all wasn’t well, but that message didn’t last very long.

Fortunately, that turnaround on Friday helped to see to it that a number of positions got assigned and was a nice thing to happen for anyone looking to increase their cash position.

Now, with more cash in hand, I’m still willing to part with some, particularly as premiums are relatively elevated and share prices have the appearance of being bargain priced.

That appearance can always be deceiving, of course, as they could and do frequently get even cheaper if they’re not attractive enough to draw in buyers.

Lately I’ve been buying more than has been the case for nearly the past 6 months, but there is still some uncertainty about what comes next for our own market.

As the 10 Year Treasury fell below 2% on Friday, once again stocks become more attractive. As China, Japan and Europe have their own hurdles that just adds to the appeal that US equity markets hold.

While the FOMC may not have gotten any real reason to justify a rise in interest rates after this past week’s Employment SItuation Report, the beginning of another earnings season may start to supply some proof that the consumer is returning and becoming more optimistic and confident. An increase in both revenues and earnings could be the sign that we all are looking for that the economy is on an expansion path and could finally be what the FOMC needs to justify the action that they’ve been telegraphing for so long.

This week I will be open to parting with cash, particularly since there are only a small number of expiring positions for the week and only a single ex-dividend position to create the cash stream that I’ve become addicted to.

As with previous weeks I will be likely drawn more to short term contracts and would love to add a dividend or two to the mix, but you never know where the opportunity will be, as the script is frequently poorly suited for unfolding events.

Daily Market Update – October 2,  2015  (9:30 AM)

The Week in Review will be posted by 9:00 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  none

Rollovers: BAC (15.50), DOW, GE ($24.50), GE ($25)

Expirations: BAC ($17)

The following were ex-dividend this week:  DOW (9/28 $0.42), EMC (9/29 $0.12), CSCO (10/1 $0.21)

The following will be ex-dividend next week:  GPS (10/5 $0.23)

Trades, if any, will be attempted to be made prior to 3:30 PM.

Daily Market Update – October 1,  2015  (9:00 AM)

What the market has given or taken on one day hasn’t necessarily been the way the market acted the next day.

Sometimes that was a good thing and sometimes it wasn’t very good.

Today could have been a victory if the market could simply do as the futures were suggesting and just trade in an ambivalent way, following yesterday’s strong gain that happened to come after a one day breathing spell in the aftermath of Monday’s 300+ point loss.

Instead, it was a tale of two halves. The morning was just horrible, but almost precisely at Noon it turned around and erased almost every single bit of the morning’s loss. That turnaround came at the 1901 level on the S&P 500, which wasn’t really something that was appearing on anyone’s chart, but that’s where it turned on a dime.

That’s just the way things have been going as following the large plunge in August that took the market into correction territory, it’s just been a series of back and forth kind of days with very little net movement when all has been said and done.

Taking a little bit of a break today might also be a good thing considering that there’s not too much reason to want to stick your neck out too much ahead of tomorrow’s Employment Situation Report and would allow some opportunity to simply digest the gains from yesterday.

The shifting sands created by large moves in alternating directions just give no foundation for predictable movement and create an environment that’s really nothing different from a coin toss.

This week’s Employment SItuation Report may be the kind of data that could create some sort of foundation or break an existing one day. It may be more important than usual this month and could serve as some real fuel if it rekindles expectations of an interest rate hike or it could real dampen hopes for any reason for renewed buying.

Despite yesterday’s gain the S&P 500 is still slightly in correction territory and continues to straddle the line. Once the Employment Situation Report is out of the way next week begins another earnings season, that seems to have snuck up quickly and may begin to give some more tangible evidence of an improving economy and maybe the long awaited evidence of an oil dividend.

With a number of positions expiring tomorrow and none yet for next week, I would be equally happy with assignments or rollovers, but may want to take some pre-emptive measures for any positions that could become out of reach for either of those outcomes in the event of a strong downdraft tomorrow.

As long as volatility is keeping forward week premiums relatively higher than expiring week premiums there may be reason to take those pre-emptive steps and look for rollover opportunities today, rather than taking the risk of being taken out of contention tomorrow.

As is usually the case, it would be nice to have a mix of everything. New positions opened, rollovers, assignments, new call sales and dividends and there is still that chance this week, especially if  there’s some good news forthcoming tomorrow and today doesn’t end up being a day that gives back yesterday’s gains.

Daily Market Update – October 1,  2015  (9:00 AM)

What the market has given or taken on one day hasn’t necessarily been the way the market acted the next day.

Sometimes that was a good thing and sometimes it wasn’t very good.

Today it might be a victory if the market could simply do as the futures are suggesting and just trade in an ambivalent way, following yesterday’s strong gain that happened to come after a one day breathing spell in the aftermath of Monday’s 300+ point loss.

That’s just the way things have been going as following the large plunge in August that took the market into correction territory, it’s just been a series of back and forth kind of days with very little net movement when all has been said and done.

Taking a little bit of a break today might also be a good thing considering that there’s not too much reason to want to stick your neck out too much ahead of tomorrow’s Employment Situation Report and would allow some opportunity to simply digest the gains from yesterday.

The shifting sands created by large moves in alternating directions just give no foundation for predictable movement and create an environment that’s really nothing different from a coin toss.

This week’s Employment SItuation Report may be the kind of data that could create some sort of foundation or break an existing one day. It may be more important than usual this month and could serve as some real fuel if it rekindles expectations of an interest rate hike or it could real dampen hopes for any reason for renewed buying.

Despite yesterday’s gain the S&P 500 is still slightly in correction territory and continues to straddle the line. Once the Employment Situation Report is out of the way next week begins another earnings season, that seems to have snuck up quickly and may begin to give some more tangible evidence of an improving economy and maybe the long awaited evidence of an oil dividend.

With a number of positions expiring tomorrow and none yet for next week, I would be equally happy with assignments or rollovers, but may want to take some pre-emptive measures for any positions that could become out of reach for either of those outcomes in the event of a strong downdraft tomorrow.

As long as volatility is keeping forward week premiums relatively higher than expiring week premiums there may be reason to take those pre-emptive steps and look for rollover opportunities today, rather than taking the risk of being taken out of contention tomorrow.

As is usually the case, it would be nice to have a mix of everything. New positions opened, rollovers, assignments, new call sales and dividends and there is still that chance this week, especially if  there’s some good news forthcoming tomorrow and today doesn’t end up being a day that gives back yesterday’s gains.

Daily Market Update – September 30,  2015  (Close)

It’s not really clear what accounted for the morning’s futures pointing to an almost 200 point gain.

It could be that Asia was strong overnight, but that has been a very inconsistent indicator for about the last month. While the early part of our market’s decline definitely followed that in Asia, the uncertainty there has seemingly now been factored into our own thinking and largely discounted at this point, although you just never know what may come next from that part of the world, for better or worse.

Whatever it is that created this morning’s early rise, it wasn’t based upon any news, so it’s likely that it’s just more of the same going back and forth that we’ve seen ever since that breakdown between our markets an China, in particular. Since the, which includes the plunge that took us to our first 10% correction in years, there has been a continuing series of waves taking us up and down and in large moves.

Most of those moves have offset one another, although the net result has still had a negative bias and following Monday’s 300+ point decline everyone was running back to their charts to see where the next levels of support happened to be, just in case the next shoe were to drop.

Yesterday was the kind of day that today, by all rights should have been. There’s really not any news to account for any kind of large move, but of course, that didn’t stop Monday from happening and it didn’t stop today from happening either.

With the Employment Situation Report looming on Friday and the prospects that it may offer another in a lengthening series of strong results, comes the idea that maybe the FOMC will finally raise rates. That could have accounted for some of the early enthusiasm this morning just as it likely accounted for the early week strength that was quickly reversed two weeks ago when the FOMC disappointed most everyone by not announcing what had been widely expected.

With both Janet Yellen and Stanley Fischer scheduled to speak this week there may be some hints of what’s to come, but because the FOMC hasn’t been exactly straight forward, those hints will have to be very heavy handed if the market is going to take the bait.

With a couple of recent familiar faces having been this week’s new purchase positions, I was more than happy to see this morning’s strength and hoped that there’s still going to be some more continuation of it, or at least that the market settles in at around these levels as the week will come to its end.

If so, there could at least be some chance to see some assignments or some rollovers.

If so, especially if there are assignments of those same familiar faces, I wouldn’t mind the continuing opportunity to consider purchasing them again and again, which is the definite advantage of having a market of stocks that is really undecided about where it wants to go. As long as the volatility can remain at these or higher levels, there can be lots of advantage in not thinking too creatively, but rather just doing the same thing, and with the very same stocks,  over and over again.

At least today did bring some opportunity to sell some calls on a couple of uncovered positions utilizing some longer term options in the hope that time will bring some more recovery. But if not, or if insufficient, at least some more premiums and dividends are collected along the way to add up and make the waiting period a little bit easier.

With just 2 days remaining for this week, it is like a number of recent previous weeks. There’s no telling where we go from here as the indications are all over the place and still do nothing to instill confidence.

In just 2 weeks earnings start anew and I’m fairly optimistic about earnings this coming quarter, just as I was the last time around.

Hopefully, though, this time around it will work out as planned and won’t be a series of earnings disappointments that coincided with the beginnings of China’s meltdown.