Category Archives: Daily Market Update

Daily Market Update – December 26, 2014 (8:30 AM)

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

The following trade outcomnes are possible today:

Assignments:  DOW, MOS

Rollovers:  HAL

Expirations:  GDX, GM, JOY

There were no ex-dividend positions this week.

Next week’s ex-dividend position is DOW

Trades, if any, will be attempted to be made before 3:30 PM EST

Daily Market Update – December 24, 2014 (Close)

This morning, the day before Christmas, was looking as if the market would be trying to add another day higher to the current string, in an attempt to make it 6 days higher in a row.

While most holidays see the day before trade to lower levels, that’s not the case for Christmas, as 67% of the time time, that shortened day ends up moving higher. Today that 67% edged up just a little itself, as the market set another new record high after having done so, with some fanfare yesterday.

Granted, after some last 15 minute selling, the DJIA barely escaped with a small gain and the S&P 500 finished just a hair lower, down 0.008%

Add that to the Santa Claus Rally that’s still owed to us and 2014 may go out on a high note, despite how energy continues to drag the broader market lower.

Still, yesterday saw the 18000 level broken for the very first time and the S&P 500 also made a new high.

In that regard 2014 is very much like 2007 in that seemingly new highs were being made on about a weekly basis, on average.

In 2014 there have now been over 50 new highs.

Today may be a day that just gets lost in that shuffle, as in 2007 those new highs stopped being news, much as they’re not very much news these days, either, unless they encompass some round number in them, such as 18000.

For now, I really don’t care whether the moves higher are newsworthy or not. I don’t mind seeing prices edging higher, but would still be every happy to see energy sector stocks make up some of what they’ve lost over the past month or more.

I wasn’t expecting to do very much today, certainly not expecting to add to the week’s new positions. Still, I was disappointed by not getting any trades come across, at all.

The likelihood, at this point of selling any new call contracts expiring this week is now very small, as the premiums were going to be tiny reflecting only 1 1/2 days of time and seeing volatility moving lower, as they are now down nearly 40% from their levels of just a week ago. For that reason sights are now set for next week’s expirations, the first week of 2015.

During that rise in volatility is was easier to diversify expiration dates, but as they are returning to their low levels seen at the time of the previous run higher beginning in mid-October came to its peak, it’s more difficult to accept the low marginal premium increases that are seen when adding more time into the equation.

With what was likely to be a slow day anyway and then a short one, at that, it’s was just a good time to wish everyone a Merry Christmas and a hope that all is in place to get 2015 off t
o a great start.

Maybe Friday will actually begin the real rally.

Daily Market Update – December 24, 2014 (9:00 AM)

This morning, the day before Christmas, is looking as if the market will be trying to add another day higher to the current string.

While most holidays see the day before trade to lower levels, that’s not the case for Christmas, as 67% of the time time, that shortened day ends up moving higher.

Add that to the Santa Claus Rally that’s still owed to us and 2014 may go out on a high note, despite how energy continues to drag the broader market lower.

Still, yesterday saw the 18000 level broken for the very first time and the S&P 500 also made a new high.

In that regard 2014 is very much like 2007 in that seemingly new highs were being made on about a weekly basis, on average.

In 2014 there have now been over 50 new highs.

Today may be a day that just gets lost in that shuffle, as in 2007 those new highs stopped being news, much as they’re not very much news these days, either, unless they encompass some round number in them, such as 18000.

For now, I really don’t care whether the moves higher are newsworthy or not. I don’t mind seeing prices edging higher, but would still be every happy to see energy sector stocks make up some of what they’ve lost over the past month or more.

I’m not expecting to do very much today, certainly not expecting to add to the week’s new positions. The likelihood, at this point of selling any new call contracts expiring this week is now very small, as the premiums are going to be tiny reflecting only 1 1/2 days of time and seeing volatility moving lower, as they are now down nearly 40% from their levels of just a week ago. For that reason sights are now set for next week’s expirations, the first week of 2015.

During that rise in volatility is was easier to diversify expiration dates, but as they are returning to their low levels seen at the time of the previous run higher beginning in mid-October came to its peak, it’s more difficult to accept the low marginal premium increases that are seen when adding more time into the equation.

With what is likely to be a slow day anyway and then a short one, at that, it’s probably just a good time to wish everyone a Merry Christmas and a hope that all is in place to get 2015 off to a great start.

Daily Market Update – December 23, 2014 (Close)

This morning’s GDP report, plus any revisions, was expected to give us a glimpse into what lower energy prices can do for the economy.

At best, it will only be a glimpse, as those lower energy prices haven’t been around for too long, but all you have to do is speak to anyone and you know that they feel as if they have more money in their pockets.

Americans like to spend money that’s in their pockets, so hopefully that sensation of feeling better off will translate into something tangible.

If the parking lots at the malls are any indication, they are doing just that, but we haven’t heard too much from retailers, as everyone has been talking about nothing but fuel prices, but in a good way..

That lack of retail in the conversation will end soon, just as Christmas Day is now just a couple of days away.

As it turned out that glimpse offered some good news as the GDP is now indicating 5% growth, which is the highest rate in 10 years.

Not quite what we used stand in awe over when it was China reporting rates even higher, but ours are a bit more believable and if the law of large numbers ever applies to anything, it’s not that easy to grow an economy the size of the United States.

The real fun may start next month, as the next scheduled GDP comes the morning after the FOMC Statement release. Of course, if today’s report shows too much growth, there’s always a chance that a data driven FOMC would see that kind of accelerating growth as a reason to begin to move interest rates higher in an effort to prevent over-heating off the economy.

But that’s an issue for another day.

This morning, in anticipation of the GDP the futures market seemed as if it is willing to add to yesterday’s record closing high. It looked as if the markets were dropping their good is bad and bad is good perspective and getting ready to make an expression of “good is good.”

With oil headed lower yesterday it was another example of the de-coupling that started last week, as stocks went very nicely higher, although this time they left the energy sector behind.

Mt thinking early this morning was that another nice day today, maybe fueled by the GDP could give some opportunity to sell some calls on those uncovered positions and that would be more important to me today than adding another new position or two, or three.

Instead, I sold those one or two new positions and only one new covered position. So much for plans.

With trading for the week rapidly coming to an end there’s even more reason to begin looking at expanded weekly options or those ending at the month’s conclusion.

This morning was a morning to watch and see where the news leads us and hopefully be able to sit passively for a while as they move higher. Instead, the trades ended up being relatively early in the session and then sitting back and watching as most everything went higher, although the S&P 500 continues to lag the DJIA, which topped 18000 for the first time ever, today.

The continuing challenge, as it has been for the past week, has been to wonder whether any climb higher is just part of the dead cat and should be taken advantage of, or part of a concerted climb higher.

So far, it has been good to resist some of the moves higher, although energy sector prices have been going back and forth. But what may have been a full correction in the making looks as if it was just another of those regular mini-corrections that come along every two months.

For the moment it looks good not having committed to strike prices, especially of a longer term nature, as there may be even more recovery ahead.

But time will tell soon enough.

Daily Market Update – December 23, 2014 (8:30 AM)

This morning’s GDP report, plus any revisions, may give us a glimpse into what lower energy prices can do for the economy.

At best, it will only be a glimpse, as those lower energy prices haven’t been around for too long, but all you have to do is speak to anyone and you know that they feel as if they have more money in their pockets.

Americans like to spend money that’s in their pockets, so hopefully that sensation of feeling better off will translate into something tangible.

If the parking lots at the malls are any indication, they are doing just that, but we haven’t heard too much from retailers, as everyone has been talking about nothing but fuel prices, but in a good way..

That lack of retail in the conversation will end soon, just as Christmas Day is now just a couple of days away.

The real fun may start next moth, as the next scheduled GDP comes the morning after the FOMC Statement release. Of course, if today’s report shows too much growth, there’s always a chance that a data driven FOMC would see that kind of accelerating growth as a reason to begin to move interest rates higher in an effort to prevent over-heating off the economy.

But that’s an issue for another day.

This morning, in anticipation of the GDP the futures market seems as if it is willing to add to yesterday’s record closing high.

With oil headed lower yesterday it was another example of the de-coupling that started last week, as stocks went very nicely higher, although this time they left the energy sector behind.

Another nice day today, maybe fueled by the GDP could give some opportunity to sell some calls on those uncovered positions and that would be more important to me today than adding another new position or two, or three.

With trading for the week rapidly coming to an end there’s even more reason to begin looking at expanded weekly options or those ending at the month’s conclusion.

This morning will probably be a morning to watch and see where the news leads us and hopefully be able to sit passively for a while as they move higher.

The continuing challenge, as it has been for the past week, has been to wonder whether any climb higher is just part of the dead cat and should be taken advantage of, or part of a concerted climb higher.

So far, it has been good to resist
some of the moves higher, although energy sector prices have been going back and forth. But what may have been a full correction in the making looks as if it was just another of those regular mini-corrections that come along every two months.

For the moment it looks good not having committed to strike prices, especially of a longer term nature, as there may be even more recovery ahead.

But time will tell soon enough.