Category Archives: Daily Market Update

Daily Market Update – June 24, 2015  (8:30 AM)

While we wait for some near term resolution to the Greek banking crisis, the market reacted very positively on Monday when there was reason to believe that an agreement was in sight and then did nothing the following day when there was no news.

This morning there’s again no news from Europe and the pre-open futures are flat waiting for the morning’s GDP data to be released.

That data will be among those indicators that the FOMC will be closely looking at in about a month, before deciding whether or not to raise interest rates before it goes on its own vacation and won’t be heard from again until September.

Interestingly, in the past couple of days there have been more people popping up doubting whether we would see any increase in those rates in 2015, at all. That was a more common belief a few weeks ago, but seemed to disappear after the last FOMC meeting, when most became convinced that eptember was going to be “lift-off” for the rate hike.

Any surprises in GDP, particularly more revisions upward for the first quarter, could go a long way in convincing the FOMC that the consumer is coming to life. Whether due to more cash in pocket from decreasing energy prices or whether from greater employment numbers and at higher wages, sooner or later that consumer spending has to kick in.

With housing picking up and those prices increasing, and minimum wage increasing and more people working, the assumption has to be that some of that additional household money is going to get put back into the economy.

While everyone knows and understands that has to happen, what has come as a surprise is just how slowly the obvious is taking to happen, maybe because people had to dig such deep holes for themselves after the last financial crisis and collapse of the housing market.

Tomorrow’s Personal Income and Outlays data may give some more of that salient data that the FOMC craves and may also be a potential market mover.

For now, indexes sit close to record highs or at new highs and as long as they can stay at these levels heading into earnings, there’s reason to believe that those markets can go even higher.

So far, this week, despite Monday’s nice gain, hasn’t had any trades get executed.

I did have a couple of trades put out yesterday but the options market has been very, very quiet, as volatility is just continuing to be so low.

There’s actually reason to consider being on the purchasing end of the options transaction as the premiums are so low and as long as the market continues to have an upward bias. By the smae token, portfolio insurance through the purchase of S&P 500 puts is fairly inexpensive, as well.

The cure for that would be some uncertainty and there should have been plenty of that over the past month, but somehow it never materialized. despite what common sense may have expected.

Common sense also says that with the market going higher you would think that premiums for call options would get bid higher, as well, as people would be looking at options increasingly as a way of cashing in on that upward momentum.

But it was that same common
sense that would have expected a spike in consumer spending to have occured more than 6 months ago as oil prices plunged, andf that still hasn’t arrived.

This morning, as the market has a moderately negative tone, there’s not much to do other than to await the GDP release and see where things will go as the market gets ready to open for trading.

While I’d like to see some more of that uphill climb so that I can finally make some trades, it would be nice to see some uncertainty come back and goive option buyers a reason to come back into the market.

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Daily Market Update – June 23, 2015  (Close)

There was a lot of optimism yesterday coming from Europe, ostensibly because people believed that some sort of agreement, maybe a very short term one, was at hand regarding the Greek financial crisis.

At this point, with so many back and forth stories and with the clock ticking away toward a deadline imposed by Christine Legarde, I’m not even sure where the story currently resides.

Today did nothing to really clarify things, but at least I know enough to know that nothing big happened today.

Judging by the pre-open futures this morning, either nothing had changed over-night, or the US stock market is ready to de-couple and move forward.

As it turns out nothing did happen, but the US market just took the opportunity to do nothing.

The pre-open futures were mildly higher and may have even been able to continue yesterday’s very nice session, but not giving up anything is good too.. Despite having given up some of those gains the previous day, it was still a very nice day and today didn’t squander any of that good spirit.

With it looking just a few days ago as if we might be heading into another of those mini-corrections, or even more, the market wouldn’t go beyond a 3% decline. Even those 5% mini-corrections that we had become accustomed to over the past 3 years aren’t able to coalesce lately.

The market was set to begin the day less than 1% below its all time highs, with the NASDAQ having surpassed those highs. A curveball from Europe could upset that picture a little, but more and more there is talk about how inconsequential the Greek economy really is and how the EU would be able to withsatnd the departure of Greece from its grand experiment.

What recourse Greece may have is doubtful, as its new government hasn’t done much to move it forward and has only tried playing various sides against one another.

In the meantime, regardless of outcome, it will be time to move on. Unlike the situation of a few years ago, with Greece again at center stage, there’s not the same kind of fear that a failure in Greece would lead to some kind of domino effect across more of the EU.

So for us it will just be another story that disappears into the ether.

It would, of course, have been very nice if some of yesterday’s strength could have continued today as we tried to get out from under the Greek story and look forward to the next earnings season or at least get over any concerns that an interest rate increase will come as early as the end of next month.

With yesterday’s Existing Home Sales up a very strong 5% and with the price of a median home back up to the high levels last seen at the peak in 2007, there was going to be extra attention paid to New Home Sales data released today, in addition to GDP data tomorrow and Personal Income and Outlays on Thursday.

In essence, it’s a busy week that may better put together a picture of how much and how fast the economy may be growing, especially on the consumer side of the equation.

Too much good news, while good, could be bad in terms of expectations for when that interest rate increase finally arrives.

For today, I didn’t expect to be parting with any cash, but retained the hope that I could finally create some with a sale or two of option contracts to help give some meaning to the week.

I tried, but there were no takers.

Maybe tomorrow.

Daily Market Update – June 23, 2015  (8:30 AM)

There was a lot of optimism yesterday coming from Europe, ostensibly because people believed that some sort of agreement, maybe a very short term one, was at hand regarding the Greek financial crisis.

At this point, with so many back and forth stories and with the clock ticking away toward a deadline imposed by Christine Legarde, I’m not even sure where the story currently resides.

Judging by the pre-open futures this morning, either nothing has changed over-night, or the US stock market is ready to de-couple and move forward.

The pre-open futures are mildly higher and may even be able to continue yesterday’s very nice session. Despite having given up some of those gains, it was still a very nice day.

With it looking just a few days ago as if we might be heading into another of those mini-corrections, or even more, the market wouldn’t go beyond a 3% decline. Even those 5% mini-corrections that we had become accustomed to over the past 3 years aren’t able to coalesce lately.

The market is set to begin the day less than 1% below its all time highs, with the NASDAQ having surpassed those highs. A curveball from Europe could upset that picture a little, but more and more there is talk about how inconsequential the Greek economy really is and how the EU would be able to withsatnd the departure of Greece from its grand experiment.

What recourse Greece may have is doubtful, as its new government hasn’t done much to move it forward and has only tried playing various sides against one another.

In the meantime, regardless of outcome, it will be time to move on. Unlike the situation of a few years ago, with Greece again at center stage, there’s not the same kind of fear that a failure in Greece would lead to some kind of domino effect across more of the EU.

So for us it will just be another story that disappears into the ether.

It would, of course, be very nice if some of yesterday’s strength could continue today as we try to get out from under the Greek story and look forward to the next earnings season or at least get over any concerns that an interest rate increase will come as early as the end of next month.

With yesterday’s Existing Home Sales up a very strong 5% and with the price of a median home back up to the high levels last seen at the peak in 2007, there’s going to be extra attention paid to New Home Sales data released today, in addition to GDP data tomorrow and Personal Income and Outlays on Thursday.

In essence, it’s a busy week that may better put together a picture of how much and how fast the economy may be growing, especially on the consumer side of the equation.

Too much good news, while good, could be bad in terms of expectations for when that interest rate increase finally arrives.

For today, I don’t expect to be parting with any cash, but retain the hope that I can finally create some with a sale or two fo option contracts to help give some meaning to the week.

Daily Market Update – June 22, 2015  (Close)

With a little more cash in hand to start the week, I’m still not overly anxious to do much spending.

I’m not particularly excited either about having a third consecutive week without any new purchases, but the cash accumulation phase seems important to me right now.

As long as that’s the case, and with an eye toward increasing the amount sitting in cash reserves, I like seeing a week get off to the kind of start that the pre-opening futures were pointing towards.

Better yet, the gains stayed all through the session.

When I have lots of cash and am anxious to spend it, it’s nice seeing the market get off to a decidedly negative start, especially if there’s not as large of an adverse impact on the positions set to expire that week.

But when I don’t have much money to spend and the expiring positions could use a boost in their prices to put them into contention for either assignment or rollover, there’s a real delight in seeing the market begin the week on a much higher note.

For the moment, credit is being given for the higher futures trading to begin the week to the prospects for some sort of short term agreement on Greece’s banking crisis, but the morning also had a couple of very big merger/acquisition stories that could be driving sentiment.

Whatever the reason, I’m happy to see it and the prospects of the entire market being moved higher.

With a few positions already set to expire this week as the July 2015 cycle gets ready to begin, I would welcome anything that brings any of those positions closer to either a rollover, or better yet, an assignment.

With another GDP Report and reports on both existing and new home sales, there are potential market movers among the scheduled news events, but it’s not really clear how the market would react to overly good news.

With the prevailing belief that interest rate hikes won’t occur until September, any particularly strong showing in the economy that may come prior to the FOMC’s next meeting late in July could offer fears for a rate hike coming as early as that next meeting.

That would likely be neagtive for the market, at least until those fears are realized in more than a month or they are dismissed.

But in either case that would mean a period of about 5 weeks of worrying about what bad things the good news might bring, while totally forgetting that it is good news.

We do that on a regular basis and squander opportunities to revel when there is perfect justification for doing so.

Just as with some Employment Situation Reports in the past few months, the best data would be those that were just in line with expectations. Neither too good, nor too bad. Staying the middling course has its advantages and in this case mild strength in the economy would be the best way to  see the market advance.

The morning’s optimism looked strong enough to have some legs as the regular trading session got ready to begin. That optimism was seen i
n every component of the DJIA, so it was spread more broadly than simply the health and energy sectors which are in focus with the buyout proposals on the table.

Those kind of large and broad moves in the pre-opening futures usually do have some lasting power, and they certainly did so today, but with the Greece overhang, there’s more to the equation than just optimism about buyouts moving the market higher.

The Greek story has about a week more to play out and may continue playing a day to day role, as it did last week and caused market gyrations.

Hopefully there will be some rational thought and action coming from the Greek government that neither incite their citizens nor markets to do the wrong things.

As the market dis finally commence its trading, I was more than happy to just watch, especially as the gains were sustained until the closing bell.

Hopefully tomorrow will bring some more and really get the July 2015 cycle off to a good start. With little desire to spend money in order to generate income, I’d really like to see that income get generated from what is already in the portfolio and if that can happen I can learn to live without opening any new positions for the third consecutive week.

If doing so still lets me atone for some of last week’s positions that expired and are now sitting uncovered.by pitting them to work, that would be just fine.

Daily Market Update – June 22, 2015  (9:00 AM)

With a little more cash in hand to start the week, I’m still not overly anxious to do much spending.

I’m not particularly excited either about having a third consecutive week without any new purchases, but the cash accumulation phase seems important to me right now.

As long as that’s the case, and with an eye toward increasing the amount sitting in cash reserves, I like seeing a week get off to the kind of start that the pre-opening futures are pointing towards.

When I have lots of cash and am anxious to spend it, it’s nice seeing the market get off to a decidedly negative start, especially if there’s not as large of an adverse impact on the positions set to expire that week.

But when I don’t have much money to spend and the expiring positions could use a boost in their prices to put them into contention for either assignment or rollover, there’s a real delight in seeing the market begin the week on a much higher note.

For the moment, credit is being given for the higher futures trading to begin the week to the prospects for some sort of short term agreement on Greece’s banking crisis, but the morning also has a couple of very big merger/acquisition stories that could be driving sentiment.

Whatever the reason, I’m happy to see it and the prospects of the entire market being moved higher.

With a few positions already set to expire this week as the July 2015 cycle gets ready to begin, I would welcome anything that brings any of those positions closer to either a rollover, or better yet, an assignment.

With another GDP Report and reports on both existing and new home sales, there are potential market movers among the scheduled news events, but it’s not really clear how the market would react to overly good news.

With the prevailing belief that interest rate hikes won’t occur until September, any particularly strong showing in the economy that may come prior to the FOMC’s next meeting late in July could offer fears for a rate hike coming as early as that next meeting.

That would likely be neagtive for the market, at leat until those fears are realized in more than a month or they are dismissed.

But in either case that would mean a period of about 5 weeks of worrying about what bad things the good news might bring, while totally forgetting that it is good news.

We do that on a regular basis and squander opportunities to revel when there is perfect justification for doing so.

Just as with some Employment Situation Reports in the past few months, the best data would be those that were just in line with expectations. Neither too good, nor too bad. Staying the middling course has its advantages and in this case mild strength in the economy would be the best way to  see the market advance.

The morning’s optimism looks strong enough to have some legs as the regular trading session gets ready to begin. That optimism is seen in every component of the DJIA, so it is spread more broadly than simply the health and energy sectors which are in focus with the buyout proposals on the table.

Those kind of large and broad moves in the pre-opening futures usually do have some lasting power, but with the Greece overhang, there’s more to the equation than just optimism about buyouts moving the market higher.

The Grrek story has about a week more to play out and may continue playing a day to day role, as it did last week and caused market gyrations.

Hopefully there will be some rational thought and action coming from the Greek government that neither incite their citizens nor markets to do the wrong things.

As the market does get ready for trading I’ll be more than happy if the futures turn out to predict a higher open and especially if it’s one that can be sustained until the closing bell.

With little desire to spend money in order to generate income, I’d really like to see that income get generated from what is already in the portfolio. I’d especially like to try to atone for some of last week’s positions that expired and are now sitting uncovered.