Category Archives: Daily Market Update

MONDAY:   More negativity seems on the way as the week is ready to begin. Lots of earnings ahead and an FOMC Statement release to maybe help out, but hard to imagine any news from the latter moving markets higher in its immediate aftermath

TUESDAY:   More earnings, more China. More disappointment? At least this morning the futures are pointing higher as the FOMC meeting begins and perhaps CHina begins to stabilize a little.

WEDNESDAY:  Could today be a rarity that sees 2 consecutive days of gains? That would be especially nice given that yesterday was a nearly 200 point advance. Today has more earnings reports, but more importantly, there’s an FOMC Statement release this afternoon. Probably a non-event, but you never know.

THURSDAY:  Another day of big gains is being followed by flat futures, so it’s anyone’s guess where today may go, but suddenly the market is just 1.5% away from its all time highs as it has reversed course from re-testing its support level to maybe trying to take on resistance levels again.

FRIDAY:. It looks like a flat start to follow up on the flat close to yesterday’s trading and maybe a quiet end to a week that halted the re-testing of support levels







Daily Market Update – July 24,  2015  (9:00 AM)

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

The following trade outcomes are possible today:

Assignments:  none

Rollovers:   BBY

Expirations:  none

The following were ex-dividend this week: FAST (7/24 $0.28)

The following will be ex-dividend next week:  KMI (7/29 $0.49)

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

Daily Market Update – July 23,  2015  (Close)

After a couple of days of disappointing earnings from some big names, especially among those that had recently taken a run higher and carrying the NASDAQ on its shoulders, there was some better news coming yesterday evening and again this morning, although there were still some disappointments in the mix, as well.

If some of those price reductions hold as we bring the week to its end, there may be some good opportunities next week, but there’s a little too much uncertainty right now, as the market itself is having a hard time getting past its resistance level, to want to commit what limited cash I have.

For example, there was no real reason that today should have gone negative and especially no good reason for it to have done so with a triple digit loss. It did exactly that as the market simply deteriorated all throughout the trading session, not really knowing what to do with itself.

In the past week we’ve completely gotten away from any discussion of international events and have really focused entirely on fundamental issues and have put forward guidance on the back burner.

Over the past few years it has been forward guidance that has sent many stocks higher or lower as earnings were released. If the market is truly a forward discounting mechanism, then that’s probably the way it should be.

However, it seems that this quarter, with continuing uncertainty over the strength of the US Dollar and energy prices, there hasn’t been too much emphasis placed on the future. Additionally, there’s also no telling what an interest rate hike, albeit, at the earliest coming near the end of the current quarter, might do to those numbers.

So, for the most part, the past week or so has been one of purity, one that has been backward looking. But the reactions to old news, on a net basis have been fairly subdued.

On an individual basis, however, if you were an owner of shares of some of those NASDAQ high fliers reporting earnings, you were brought back to earth. While the net market move hasn’t been really great, there have certainly been no shortage of very large moves coming after earnings have been released.

While I often find playing earnings a potentially appealing activity, those option premiums, whether calls or puts, just haven’t made the effort worth the risk and the options market has been consistently under-estimating the implied move, as a result.

At the moment that is the seeming paradox in markets and derivatives pricing.

The derivatives are priced as if there’s minimal risk, but the market feels as if there is lots of risk.

That usually works its way out, but it has really been taking a very long time for that to happen. Unfortunately, the way that sort of thing usually works out is for some kind of explosive move and typically that means an explosive move to the downside.

With the week now coming to its end and with only a single position set to expire, there’s not much action in the cards.

The morning’s futures trading was subdued, but for the most part this week the futures haven’t really given much indication of what the day’s trading will hold.

Today was just another example of that and ultimately gave no reason to jump in and pick up seeming bargains. Maybe tomorrow will be different, but I think that I can wait until Monday.

Daily Market Update – July 23,  2015  (9:00 AM)

After a couple of days of disappointing earnings from some big names, especially among those that had recently taken a run higher and carrying the NASDAQ on its shoulders, there was some better news coming yesterday evening and again this morning, although there were still some disappointments in the mix, as well.

If some of those price reductions hold as we bring the week to its end, there may be some good opportunities next week, but there’s a little too much uncertainty right now, as the market itself is having a hard time getting past its resistance level, to want to commit what limited cash I have.

In the past week we’ve completely gotten away from any discussion of international events and have really focused entirely on fundamental issues and have put forward guidance on the back burner.

Over the past few years it has been forward guidance that has sent many stocks higher or lower as earnings were released. If the market is truly a forward discounting mechanism, then that’s probably the way it should be.

However, it seems that this quarter, with continuing uncertainty over the strength of the US Dollar and energy prices, there hasn’t been too much emphasis placed on the future. Additionally, there’s also no telling what an interest rate hike, albeit, at the earliest coming near the end of the current quarter, might do to those numbers.

So, for the most part, the past week or so has been one of purity, one that has been backward looking. But the reactions to old news, on a net basis have been fairly subdued.

On an individual basis, however, if you were an owner of shares of some of those NASDAQ high fliers reporting earnings, you were brought back to earth. While the net market move hasn’t been really great, there have certainly been no shortage of very large moves coming after earnings have been released.

While I often find playing earnings a potentially appealing activity, those option premiums, whether calls or puts, just haven’t made the effort worth the risk and the options market has been consistently under-estimating the implied move, as a result.

At the moment that is the seeming paradox in markets and derivatives pricing.

The derivatives are priced as if there’s minimal risk, but the market feels as if there is lots of risk.

That usually works its way out, but it has really been taking a very long time for that to happen. Unfortunately, the way that sort of thing usually works out is for some kind of explosive move and typically that means an explosive move to the downside.

With the week now coming to its end and with only a single position set to expire, there’s not much action in the cards.

The morning’s futures trading is subdued, but for the most part this week the futures haven’t really given much indication of what the day’s trading will hold.

Daily Market Update – July 22,  2015  (Close)

More earnings came after yesterday’s closing bell and they continued the shift of the path of the first full week of earnings. That shift began before yesterday’s open.

While yesterday was another in a series of days in which the DJIA was lagging behind the S&P 500 and the NASDAQ 100, due in part to some large moves in DJIA components and a streak of forward moves by a very small handful of NASDAQ components, this morning, as we got ready to begin, the shoe was clearly on the other foot.

This time, the dual disappointments from Microsoft and Apple added a double dose of earnings disappointment to the NASDAQ, which is based on market capitalization, as opposed to the DJIA, which is based on share price.

That share price is one of the reasons, maybe the only real reason that Apple had to split 7 to 1. Had it not done so, this morning’s $9.50 decline in the futures trading would have detracted about 420 points from the DJIA, instead of the paltry 60 points.

Microsoft, on the other hand, despite being only half as much as Apple on a percentage basis, was costing the DJIA only about 10 points during the pre-opening trading.

On the other hand, the combined market capitalization of Apple and Microsoft was over $1.1 Trillion before this morning’s prices settle.

At that moment, before the opening bell was to rings, as a result of that one – two punch, the DJIA was down about 0.2%, the S&P 500 was down about 0.4% and the NASDAQ 100 was down 1.1%.

When it was all over Apple contributed about 35 points of the DJIA’s 68 point loss, while Microsoft accounted for about 11 points of that loss.

That’s a complete reversal of the picture as the market had been moving higher, but sooner or later that’s the way most things go. Whatever goes up goes down and whatever lags, tends to catch up in relative terms.

While the earnings reports after yesterday’s close were disappointing, it really remained to be seen what kind of an impact the most recent reports would have on today’s market. Yesterday’s early disappointments took their real toll on the DJIA, but there was enough pain to spread around as the broader market got progressively weaker as the morning went on.

What was also noticeable yesterday was the large hits taken by some lesser known stocks when reporting earnings disappointments. Even announcing the plans to cut jobs, normally something that offsets some of the price declines associated with disappointing earnings, did little, if anything to stem the decline in Lexmark, for example.

With a little bit of cash still in hand, I don’t think that I’ll be likely to spend any more for the remainder of the week unless there’s some significant weakness to capitalize on, such as in Lexmark, maybe.

With still lots more earnings yet to be reported, there’s a need to erase the disappointments from yesterday and a need to paint a picture that’s consistent with an expanding economy.

Of course, that would re-introduce fears of an interest rate increase, but most are beginning to accept the likelihood that a rate increase will become reality by September.