Category Archives: Daily Market Update

Daily Market Update – September 22, 2014 (8:00 AM)

After last week’s downpouring of anticipated news this week will be a snoozefest by comparison, but as we’ve seen over and over again, there isn’t necessarily a correlation between news and market movements.

A quiet week on the newsfront isn’t necessarily something that offers immunity from a market exploding higher or crumbling under its weight. There needn’t be a tangible reason for either of those occurrences, although we always look for the reasons as both a means of predicting and a means of explanation.

Too bad it never really seems to work that way. Even after all of the explanations in hindsight, they just don’t seem to have predictive value the next time around.

Certainly, the impact of news isn’t consistently a lasting one. We tend to forget and move on quickly, but are also subject to so many bits of news, each of which requires consideration, if not also action.

In a week such as last the news events were from such different directions, the FOMC and the Scotland independence referendum, and were so completely unrelated that it was entirely conceivable that their results could have whipsawed markets,

Instead, everything went as planned and their impacts were additive.

That has pretty much been the story of the past two years.

While there have been some disappointments, they’ve been very temporary in impact, while the greatest challenges have been the unpredicted and unpredictable, most often coming from geo-political issues around the world.

This week everything is quiet on the scheduled news front, other than for Friday’s GDP announcement and the world is relatively quiet, insofar as there’s little new expected to assault our humanity.

With markets at their familiar “new high” levels to begin this week, precious metals sinking even further and interest rates still under the  FOMC’s thumb of “considerable time,” it just makes perfect sense that money would stay at work in equity markets.

It’s hard to argue with that logic, but it’s also hard to accept it when there is a realization that such logic is what most everyone in the world is thinking will be the only path to follow.

This morning the market looks as if it will get off to a tentative start.

With enough assignments from last week to fuel some buying this week I don’t have any great plans to abandon some caution, as I would still like to increase my cash reserves as this week comes to its end.

As the first week of the October 2014 cycle is set to begin and already having a number of positions set to expire this week, any new positions will be considered with both weekly and expanded weekly options, in order to continue the process of attempting to develop some diversification in contract expiration dates.

I would especially like to see some opportunities to sell contracts on those positions that just seemed to expensive to rollover last week and get those back to work. The more of those opportunities the less is the need to create new positions to generate income for the week, so I would welcome those opportunities over buying opportunities for now.

MONDAY:  Not too much news this week in follow-up to last week’s torrent that did little to alter the landscape. For those calling for an S&P 500 top marked by the Alibaba IPO today begins the countdown that has been nerly two years in the making

TUESDAY:     The market did begin the appeasement of those that believed the appearance of Alibaba would mark the top. This morning there appears to be some continuation as we sit less than 0.7% from the market’s high.

WEDNESDAY:  Two consecutive triple digit losses barely leaves us 1% below the closing highs. Following the familiar pattern it just looks like we’re due for another bimonthly drop in markets. Hopefully, if that’s the case the pattern continues with the obligatory rebound

THURSDAY:    Which market are you going to believe? The one yesterday or the one from earlier in the week? This morning the market itself doesn’t seem to know which way to go. Maybe it just will wait until tomorrow’s GDP

FRIDAY:  This will be one good week to see come to its end, especially as nothing of substance has occured to bring about the four preceding days of triple digit moves.







Daily Market Update – September 19, 2014 (8:30 AM)

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

Today’s possible outcomes include:

Assignments:  C, CCL, PFE

Rollovers: COH, FAST

Expirations: CHK,  EBAY, GM, HFC, K, SBGI ($29), SBGI ($31)

Some of the expiring positions are simply too costly to rollover due to bids in $0.05 increments

This week Las Vegas Sands (9/18 $0.50) was ex-dividend

Next week Whole Foods will be ex-dividend (9/24 $0.12) and Cypress Semiconductor (9/23 $0.11), but both may be subject to early assignment.

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

Daily Market Update – September 18, 2014 (Close)

The initial response to yesterday’s FOMC statement was confusion.

While there’s usually some kind of knee-jerk reaction, this time traders really didn’t know what to do as the wording, just as Jon Hilsenrath of the Wall Street Journal had said would be the case, remained unchanged.

The market went back and forth with the release but ultimately found reason to be positive during Janet Yellen’s press conference, which was longer than most, having had an unusually long prepared statement portion read before questioning began.

Some may have come to the realization that the dissenting votes in this month’s statement came from those who will no longer have a vote in just four months.

What was clear during the follow-up to the statement’s release was that the more Janet Yellen spoke the more comfortable the market became. Almost immediately as the press conference ended the market started coming down from its highs and ended up closing the day with only a mediocre gain.

But still a gain.

Getting past the FOMC eliminates one of the hurdles for the week.

Today’s hurdle, which really has its impact tomorrow, will be the results of Scotland’s independence referendum, in which 16 and 17 year olds have been newly enfranchised to vote. While they can get married and serve in the military at those ages, they cannot vote in general elections, but will be able to do so today.

Reportedly, that group is overwhelmingly for Scotland’s independence, which probably shouldn’t come as too much of a surprise. What is surprising is that their support is  said to be as a result of their concern that under continued British rule the social safety net, including health care, that they have come to view as an entitlement may be put into private hands or eliminated.

Whether an independent Scotland can continue to provide the same kind of social services isn’t part of the equation, at least for some and could help the “Yes” vote predominate.

That could make Friday a very interesting day. WHat it did do, for another one of those inexplicable reasons, was to make today an unusually strong day in advance of tomorrow’s joint events.

With the independence vote seeming to be so close there’s not too much likelihood that any outcome has already been reflected in the market’s pricing. Currency traders know of the impact of the uncertainty, but thus far, our own equity markets have been standing by and awaiting an outcome and then an understanding of what either outcome can really mean in the short and long terms.

I have no clue, other than to know that uncertainty is almost always a bad thing and the only outcome that really brings uncertainty is very possibly in the hands of 16 and 17 year olds.

Having once been at that stage in life that doesn’t give me too much confidence.

This morning the market appeared to have some confidence as it awaitsedScotland’s decision and then the manner in which the Alibaba IPO would be executed, as well as its reception.

With yesterday’s challenge having been met today’s challenge was to decide whether to roll over any positions that still have a chance to be assigned, in order to eliminate the chance that they might get taken down by any untoward market response tomorrow.

As the morning began I was disinclined to do so but hoped to get some opportunity to rollover those positions that have a lower likelihood of being assigned. That didn’t happen, although a couple of new covered positions were created and used some forward weeks in a feeble attempt to get some diversification in time.

At any rate, waking up tomorrow morning will be interesting and the futures trading tomorrow may be the kind that has follow through for the rest of the day, as opposed to the mundane kind of daily trading that we normally see.

Hopefully the close of the September option cycle won’t be marred by the constellation of events colliding in the next 24 hours or so and then further marred by our imperfect interpretations of what goes on around us.

Daily Market Update – September 18, 2014 (8:45 AM)

The initial response to yesterday’s FOMC statement was confusion,

While there’s usually some kind of kneejerk reaction, this time traders really didn’t know what to do as the wording, just as Jon Hilsenrath of the Wall Street Journal had said would be the case, remained unchanged.

The market went back and forth with the release but ultimately found reason to be positive during Janet Yellen’s press conference, which was longer than most, having had an unusually long prepared statement portion read before questioning began.

Some may have come to the realization that the dissenting votes in this month’s statement came from those who will no longer have a vote in just four months.

What was clear during the follow-up to the statement’s release was that the more Janet Yellen spoke the more comfortable the market became. Almost immediately as the press conference ended the market started coming down from its highs and ended up closing the day with only a mediocre gain.

But still a gain.

Getting past the FOMC eliminates one of the hurdles for the week.

Today’s hurdle, which really has its impact tomorrow, will be the results of Scotland’s independence referendum, in which 16 and 17 year olds have been newly enfranchised to vote. While they can get married and serve in the military at those ages, they cannot vote in general elections, but will be able to do so today.

Reportedly, that group is overwhelmingly for Scotland’s independence, which probably shouldn’t come as too much of a surprise. What is surprising is that their support is  said to be as a result of their concern that under continued British rule the social safety net, including health care, that they have come to view as an entitlement may be put into private hands or eliminated.

Whether an independent Scotland can continue to provide the same kind of social services isn’t part of the equation, at least for some and could help the “Yes” vote predominate.

That could make Friday a very interesting day.

With the vote seeming to be so close there’s not too much likelihood that any outcome has already been reflected in the market’s pricing. Currency traders know of the impact of the uncertainty, but thus far, our own equity markets have been standing by and awaiting an outcome and then an understanding of what either outcome can really mean in the short and long terms.

I have no clue, other than to know that uncertainty is almost always a bad thing and the only outcome that really brings uncertainty is very possibly in the hands of 16 and 17 year olds.

Having once been at that stage in life that doesn’t give me too much confidence.

This morning the market appears to have some confidence as it awaits Scotland’s decision and then the manner in which the Alibaba IPO is executed, as well as its reception.

With yesterday’s challenge having been met today’s challenge is to decide whether to roll over any positions that still have a chance to be assigned, in order to eliminate the chance that they might get taken down by any untoward market response tomorrow.

At the moment I’m disinclined to do so but would hope to get some opportunity to rollover those positions that have a lower likelihood of being assigned.

At any rate, waking up tomorrow morning will be interesting and the futures trading tomorrow may be the kind that has follow through for the rest of the day, as opposed to the mundane kind of daily trading that we normally see.

Hopefully the close of the September option cycle won’t be marred by the constellation of events colliding in the next 24 hours or so and then further marred by our imperfect interpretations of what goes on around us.