Category Archives: Daily Market Update

Daily Market Update –  November 21, 2016 (7:30 AM)

This is an odd week.

That’s because I have more money to spend than in quite a while, thanks to 2 assignments and the expiration of some short puts.

It’s also a holiday shortened trading week with no positions set to expire and only one ex-dividend position.

Ordinarily, that would see me wanting to create some income opportunities for the week.

But my inclination at the moment is not to dip into cash reserves.

Part of that is because I don’t want to dip into those hard earned cash reserves, but the other half is that the premiums just aren’t very good.

Early this morning I already had my sights on the price of oil hoping that there might be an opportunity to re-open another new position in that old 2016 favorite, Marathon Oil.

But it doesn’t look as if the move is in the right direction, so that may be off the map, too.

Last week was a quiet one from a market movement perspective, even as I was happy with the amount of trading that I was able to do and the ability to create some income flow while also adding to cash reserves.

This week could very easily also be a quiet market week, especially from my trading perspective, but it could also be a volatile one due to the anticipated low trading volume.

At times like that I would rather not flip a coin if considering committing new cash, so I may just stay on the sidelines.

If so, I don’t mind any outcome.

A move higher takes me for a ride and a move lower may open up some buying opportunities for the cash.

That cash doesn’t burn the same hole in my pockets as it used to, anyway.

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Daily Market Update –  November 18, 2016 (7:30 AM)

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments: MRO, MS

Rollovers: none

Expirations:   COH, GME, INTC, MRO (puts)

The following were ex-dividend this week:    MRO (11/14 $0.05)

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

With IP and M already rolled over earlier in the week, it looks as if it may be a very quiet day of personal trading today.

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Daily Market Update –  November 17, 2016 (Close)

Now that the excitement about the election seems to be over, we’ve had a fairly boring week, but at least there haven’t been any attempts to peel back the gains of last week.

Neither has there been any alarm about what is now very likely to happen next month.

With more retail reports coming out this morning that have had more upside surprises and more good cheer to forecast for 2017 and what remains of 2016, it seems pretty obvious that we will finally see an interest rate hike in 2016, a full year after the first in 9 years.

Janet Yellen pretty much confirmed that today even as it wasn’t always clear that her Congressional questioners really had much understanding about anything at all.

In the meantime, we had been expecting several interest rate increases, but small ones, for the past year.

The only surprise that could come is if the FOMC decides to do more than just institute a small increase and in effect do nothing more than to keep up with market forces that have been driving the interest rate on the Treasury Department’s 10 year note higher and higher.

That might be taken well by investors.

But it seems unlikely that the FOMC would saddle the incoming President with that kind of unexpected move, even as they are supposed to be above politics.

I haven’t heard anyone yet speak of the possibility, but as more and more good news seems to be coming in, someone, somewhere, has to remember and fear the old days and can recall how inflation actually gets started.

Over the next days I just hope that there continues to be some share inflation so that I can add to my cash reserves and maybe generate a little bit of income for the week.

Today, I took advantage of some price strength to rollover 2 positions that didn’t look like they would get assigned. It was easier to do that because there are about 3 positions that have a fairly good degree of certainty that they will contribute to my cash reserves.

Besides, I also wanted the cash stream and didn’t want to lose a chance of getting it. 

Unlike some recent call sales, I don’t have to live that long in order to reach the expiration dates used today.

Still, I’m really not certain whether I want to have lots of cash going into 2017 or not, but I do like the market taking a little breather to consolidate these gains.

Traditionally, that means a step higher, but the past 2 years it hasn’t really worked that way, even as we do reach new highs.

If it’s any consolation, 2017 won’t be any less confusing

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Daily Market Update –  November 17, 2016 (7:30 AM)

Now that the excitement about the election seems to be over, we’ve had a fairly boring week, but at least there haven’t been any attempts to peel back the gains of last week.

Neither has there been any alarm about what is now very likely to happen next month.

With more retail reports coming out this morning that have had more upside surprises and more good cheer to forecast for 2017 and what remains of 2016, it seems pretty obvious that we will finally see an interest rate hike in 2016, a full year after the first in 9 years.

We had been expecting several increases, but small ones.

The only surprise that could come is if the FOMC decides to do more than just institute a small increase and in effect do nothing more than to keep up with market forces that have been driving the interest rate on the Treasury Department’s 10 year note higher and higher.

That might be taken well by investors.

But it seems unlikely that the FOMC would saddle the incoming President with that kind of unexpected move, even as they are supposed to be above politics.

I haven’t heard anyone yet speak of the possibility, but as more and more good news seems to be coming in, someone, somewhere, has to remember and fear the old days and can recall how inflation actually gets started.

Over the next 2 days, I just hope that there continues to be some share inflation so that I can add to my cash reserves and maybe generate a little bit of income for the week.

I’m really not certain whether I want to have lots of cash going into 2017 or not, but I do like the market taking a little breather to consolidate these gains.

Traditionally, that means a step higher, but the past 2 years it hasn’t really worked that way, even as we do reach new highs.

If it’s any consolation, 2017 won’t be any less confusing

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Daily Market Update –  November 16, 2016 (Close)

Here we are now past mid-week and the earnings reports are going to begin slowing down considerably as the option cycle comes to its end.

For the most part retailers have been good and their guidances haven’t been dour.

Today, in fact, there was some downright positive news from a middle tier retailer, including some nice guidance.

With the bond market doing its work for it and employment closing in on that level referred to as “structural unemployment,” it seems a pretty safe bet that the FOMC will do what it did last December.

Now the question will be whether it does what it was expected to do in 2016, once 2017 opens its doors for business.

At this point, I think we may finally get it, though.

Inflation, especially in its early stages is a good thing and low oil prices are a good thing.

That combination should be wonderful and I think that if the latter can continue to stay in the $50 range, 2017 will be a very good year for stock markets, as the past 2 years have been simply treading water.

You probably also have to factor in the early days of a Trump Presidency in which some of the uncertainty right now may disappear and we may learn about those policy decisions that could help business and the business cycle.

That’s all fine, but I just want to finish the November 2016 option cycle and do something with the 8 different positions that are coming up for expiration in a few days.

At this point I expect that there will be a mix of assignments, rollovers and expirations.

Unlike the past year, I’m not too concerned about the expirations.

Even in a low volatility environment, I think that there will be upside price movement and opportunity to sell calls on those positions.

It’s all about continuing patience.

Ultimately, you would like to see every position you own out-performing the index for the holding period in question and you want to see your net assets showing a gain better than the index or a loss less than the index for the time period in question.

For me, 2016 has been a good one, just like 2015 was not.

I’m more optimistic about 2017’s prospects both for the market and for personal fortunes, but let’s get through November and December, first.

Or maybe we should just get past this week.

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