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Daily Market Update – June 16, 2015 (Close)
Yesterday was another in a series of days to feel negatively about the market. Although the focus has very recently been on Greece and the back and forth it has been having with both the ECB and the IMF, that focus will shift pretty fast as the FOMC Statement is released tomorrow. That shift may have already happened as the market erased all of yesterday’s loss and traded just as yesterday did, only in the opposite direction. Yesterday was a pretty bad day, even as it closed nearly 50% below the day’s lows. At least this morning there was no evidence of any further crumbling ahead of the opening bell. There was also no evidence of the market deciding to get optimistic ahead of tomorrow’s release. The fact that the market didn’t pile on the losses during the futures session could alone have been seen as a victory of sorts, as there’s been very little reason for optimism lately. The complete reversal once trading started is another victory, at least in kind, if not really meaningful. Those occasional triple digit gains, such as last week, when it looked as if there might be some kind of agreement on the Greek issue, are just blips that have no meaning. If they do have meaning it would only be if we are still in a bull market. That’s because the types of really large moves higher that we have been seeing the past few months after some large losses, usually only happen after bear markets. While we’re probably still in that bull market, it’s really hard to know except years after the fact, as certain market moves can be seen as preludes only in hindsight. With the market now again only 2.5% off from its all time highs the feeling is far more negative than a mere 2.5% should warrant, although some will have a sense of optimism after today’s gains. That’s because over the past few years we have had these kinds of declines on a very regular basis and simply moved higher from there. Today could have been more of the same, just as easily as it could have been a bull day in a long term bear market. While this may not be any different and while most of the previous declines likely had some of the feeling that the big one was coming, it’s difficult to see where the next bit of optimism is going to come from, even with today’s optimism. Where it may arise is from the feeling that a burden has finally been lifted once interest rates are finally raised. There may be some hint of that to come tomorrow and that could result in a relief rally, but the amount of data coming in to support the interest rate increase hasn’t been very overwhelming. We may be seeing the beginning of a trend, but it does seem to be very early in the process to make the jump and pull that trigger. Still, it would be a good thing for that decision to be finally made. With yesterday’s weakness in the market and an unwillingness to put additional money on the line, I had a few rollover trades placed, but none could get executed. I was hoping that the very mild decline being seen this morning wouldn’t be too much of a barrier to getting something done this week, but even the strong broad move didn’t help to get any done today. Making some rollover trades ahead of the FOMC Statement release may be a good thing if the response by the market isn’t going to be welcoming, but those opportunities are becoming sparse as the market has been so tentative lately. With some more possibility of an agreement ahead among Greece, t With no good news having been digested by the markets in a while, any remotely good news may become exaggerated. If so, I hope that comes before the week’s end and best of all would be additive to any good news we might react to from the FOMC. I’d like to get out of the June 2015 option cycle and into the July cycle as unscathed as possible and with cash to show for it, but that may be a hard fought battle at the moment.
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