Category Archives: Daily Market Update

Daily Market Update – August 3,  2015  (8:30 AM)

With last week being another in a direction higher, the market has continued its back and forth character for a while, with occasional minimally sustained moves lower or higher.

Lately, we havent even been able to get a real mini-correction going, although we came close on an intra-day basis. Otherwise, it’s been 5 months since there has been a 5% drop on a closing basis. We used to talk in terms of a 10% drop, but for that you really have to go back in time.

What has been missing for a while has been any kind of sustained move and as we sit getting ready to begin the eighth month of the year, the market is essentially unchanged, owing most of whatever gains it has for the year on the past week.

This late in the year it’s somewhat unusual to keep hearing the phrase “and with today’s loss, the market has given up all of its gains for the year.”

That’s been very commonly uttered the past few months, yet somehow the market has resisted staying down or getting up.

Looking at this morning’s futures, it seems to be a perfect reflection of that kind of indecision, as the futures are perfectly flat for the morning.

If China stays calm for the week, there’s very little international news that should have an impact on markets this week. There are still earnings to come, but the next important wave of earnings begins sometime next week as Retail begins to report and will continue in the week following.

There is an Employment Situation Report this week, but with no Federal Reserve meeting for nearly 2 months, any incoming data today can be old and stale by the time the FOMC gets together to make an interest rate decision, which is increasingly not looking as if it will result in a September rate increase.

So it’s not too likely that Friday’s report would have any impact, but the guess is that if it is outside of the expected range, a bad number would move markets down, while a really good number might send the market higher. That’s the way economic news is supposed to work when people aren’t trying to over-analyze everything.

The one thing that should be noted by now is that for the past year, markets, pundits and analysts have all been wrong about when that first rate increase would come and fears of that increase have perenially depressed the market, as the fears simply got stretched out over time.

This may end up being a quiet week for the market and will definitely be a quiet week for me. With limited cash and no positions set to expirte this week, the best bet for activity would be if the market could somehow find a way to add some real gains and perhaps create an opportunity to sell some calls on uncovered positions.

I won’t hold my breath, but as we’ve been seeing over and over again, the morning’s futures trading doesn’t necesseraily mean anything for the trading day to come.

I hope that’s going to be the case this morning.

Daily Market Update – July 31,  2015  (8:45 AM)

The Week in Review will be posted by 6 PM and the Weekend Update will be posted by Noon on Sunday.

The possible trade outcomes today are:

Assignments:   none

Rollovers:   BBY

Expirations:   DOW

The following were ex-dividend this week: KMI (7/29 $0.49), TXN (7/29 $0.34)

The following will be ex-dividend next week: INTC (8/5 $0.24)

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

Daily Market Update – July 30,  2015  (Close)

With no news coming from the FOMC yesterday, the market correctly anticipated that to be the case and tacked on another nice gain to the one seen on Tuesday.

Suddenly, the move to re-test the support level at the 2045 level of the S&P 500 was halted and the market is now within about 1.5% of its all time highs and in a position to re-test resistance.

Technicians like to think that as the lows get higher and the highs get lower, that kind of convergence of lines indicates that there will be some sort of break out, but they can’t say in which direction that breakout will be.

The catalyst to the upside could be earnings, but we’re now about at the mid-way point and many of the significant companies have now already reported. However, what may hold some potential for more moves could be retail earnings, which have yet to be released.

Other than that, the relative quiet on the world front, especially some calm now coming from the Chinese stock markets, after a rough start to the week, could remove a barrier from moving higher.

This morning was another GDP release, including revisions to previous data. In 2015 some of those revisions have been fairly significant and have caused an entire shift in sentiment about where we were and where we were going.

Today’s GDP data, even though showing growth of 2.3% was disappointing, but the market was basically a yawner all day, other than for the first 30 minutes when the DJIA was down triple digits.

A stronger than expected GDP and any upward revisions would have gotten tongues wagging again about a September rate hike, but that has been expected for so long at this point, that you would have to believe it has already been discounted and wouldn’t be considered as bad news. We might actually be at a point that good economic news would be seen as good economic news for a change.

Instead, the GDP was on the low side and was seen as bad news, the way you would expect normal people to react.

But eventually came the thought that if the FOMC is still swearing that it is going to be data driven and if growth isn’t heating up enough, then where’s the reason to raise rates, even in September?

This morning the futures were flat and after the past two days you couldn’t blame the market for taking a little break. But as we’ve been seeing lately, there’s very little predictive value in the futures. We’ve even seen some reversals on those days when the futures were making large moves, so it was really anyone’s guess how today would go. 

At this point, having already rolled over half of the positions set to expire this week, there’s not too much more to do other than to hope that the march higher continues.

With no expirations scheduled for next week and with cash at very low levels, I’d like to see some assignments, but that appears unlikely, although there’s still some glimmer of hope for Best Buy with two days of trading left in the week.

It, along with so many others, though, has had a rough time putting consecutive winning sessions together, just as the market has had a tough time doing so.

While it would have been nice if today could have added another day onto that modest market winning streak, there’s always the chance to start anew tomorrow and maybe see gains trickle down to members of the indexes in a more broad way than the market’s advance has been to date.

While most investors aren’t socialists at heart, they might agree that this one be an acceptable instance of sharing the wealth.

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

With no news coming from the FOMC yesterday, the market correctly anticipated that to be the case and tacked on another nice gain to the one seen on Tuesday.

Suddenly, the move to re-test the support level at the 2045 level of the S&P 500 was halted and the market is now within about 1.5% of its all time highs and in a position to re-test resistance.

Technicians like to think that as the lows get higher and the highs get lower, that kind of convergence of lines indicates that there will be some sort of break out, but they can’t say in which direction that breakout will be.

The catalyst to the upside could be earnings, but we’re now about at the mid-way point and many of the significant companies have now already reported. However, what may hold some potential for more moves could be retail earnings, which have yet to be released.

Other than that, the relative quiet on the world front, especially some calm now coming from the Chinese stock markets, after a rough start to the week, could remove a barrier from moving higher.

This morning will be another GDP release, including revisions to previous data. In 2015 some of those revisions have been fairly significant and have caused an entire shift in sentiment about where we were and where we were going.

A stronger than expected GDP and any upward revisions will get tongues wagging again about a September rate hike, but that has been expected for so long at this point, that you would have to believe it has already been discounted and wouldn’t be considered as bad news. We might actually be at a point that good economic news would be seen as good economic news for a change.

This morning the futures are flat and after the past two days you couldn’t blame the market for taking a little break. But as we’ve been seeing lately, there’s very little predictive value in the futures. We’ve even seen some reversals on those days when the futures were making large moves, so it’s really anyone’s guess.

At this point, having already rolled over half of the positions set to expire this week, there’s not too much more to do other than to hope that the march higher continues.

With no expirations scheduled for next week and with cash at very low levels, I’d like to see some assignments, but that appears unlikely, although there’s still some glimmer of hope for Best Buy with two days of trading left in the week.

It, along with so many others, though, has had a rough time putting consecutive winning sessions together, just as the market has had a tough time doing so.

We’ll see whether today can add another day onto that modest market winning streak and whether or not that streak trickles down to members of the indexes in a more broad way than the market’s advance has been to date.

While most investors aren’t socialists at heart, they might agree that this one be an acceptable instance of sharing the wealth.

Daily Market Update – July 29,  2015  (Close)

Yesterday was a nice break from a series of days that could make one only pessimistic about what was to come next.

Possibly, the catalyst was that the Chinese market wasn’t down as much as it had been the previous day and may have looked as if it was beginning to moderate on this next wave of weakness, as the government again sought to control its behavior.

What would be really nice, unless all you care about is volatility, would be to see more than just a single day of gains,

Lately it has been very difficult to see stocks that aren’t in the news actually string together 2 or more days higher. It has also been a period in which stocks are taking longer and longer to recover from their declines. That is one of the things that makes the current levels of the DJIA and S&P 500 so deceiving.

It’s still on the backs of a few that the market looks to be healthy on the surface.

This morning the futures were pointing just a little bit higher, and that had to be taken as a cautious positive sign, but it turned out that no caution was required.

Overnight, the Chinese stock market reversed course and actually finished higher for the session and so that at least wasn’t going to be something to weigh on today’s market, although the situation in China isn’t going to be going away anytime soon.

Today was also to be the final FOMC Statement release until summer comes to its end in 2 months, but the market didn’t wait to start its party.

It’s wasn’t too likely that there would be anything contained in the release this afternoon that should either excite or spook markets, but it wouldn’t have been too surprising if some of the wording today in the statement gives people something to mull over for the next two months, as economic data will still be forthcoming between now and September.

With yesterday’s gain I wanted to see more of the same, even at the expense of volatility and premiums. Like some others, I’d especially like to see some moderation of the recent bear market in energy and materials. Although both sectors may represent oversold conditions, what they really need is not some sympathy from investors who are driven by technical factors, but rather some demand driven by economic activity.

With only a single new purchase so far this week and cash reserves down about as low as it can go, I’m not too likely to add any new positions this week. Having already rolled over 2 of the week’s expiring positions and the remaining 2 not looking as if they may be rollover candidates, this may be a very quiet few days ahead.

With regard to those rollovers, I decided that I wanted to try and keep the Texas Instruments dividend after seeing its price unexpectedly surge along with everything else yesterday.

The thinking was that there was still a possibility of early assignment with a rollover to the August 14th expiration, but at least that would have delivered the equivalent of about 85% of the dividend and then recycled the cash for further investment. Otherwise, there was a very high probability of assignment of the July 31st expiration contracts.

The other side of the coin is that in so doing it eliminated any possibility of being able to recycle the cash.

Twitter, on the other hand, was a rollover of puts in the face of significant strength heading into earnings. In that case the worst outcome of the rollover would be to delay being able to exit the position, while the advantage was being able to wring extra premium while awaiting some price recovery in the event that shares dropped.

For Twitter it was a real rollercoaster ride as shares went about $5 higher after earnings were announced. But then the dourness in the conference call ended up seeing shares drop $4, or a net change of about $9 from peak to trough, literally in the space of minutes in the after hours session.

Both of those early rollovers seemed warranted, but as always, time will tell, as I still had my Texas Instrument shares this morning and now another month to see whether Twitter can overcome itself.

Also, for a change, tomorrow we get to see whether we can string yet another day on to these gains and make the illusion of a healthy market become a reality.

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