Category Archives: Daily Market Update

Daily Market Update – June 30, 2014 (Close)

A 3 1/2 day trading week that ends with the Employment Situation Report as many of the big boys head out to the Hamptons early to start the summer can make for a quiet trading week.

In volume, but not necessarily in outcome.

Other than some surprise that might be contained in the monthly numbers reported Thursday morning, there really isn’t much that should move markets, but you can never tell what kind of anomalous moves can be found during light volume trading.

While last week seems as if the market was already on vacation this week it definitely becomes reality and my expectation isn’t to be doing too much trading.

For most of today it seemed as if most everyone had gone away as well, even as the market drifted lower in the final hour after having spent the day in a pretty tight trading range.

This was one of those days that I could have done something else or maybe tried multi-tasking, even though there were a few, not terribly exciting trades to be made.

Coming off a forgettable week I would have loved to see a return to the ability to sell calls on existing positions rather than aggressively adding new positions. With only a handful of positions expiring this week and with premiums reflecting a much shorter week it’s a little more challenging to find any opportunities that will expire this week. That may result in adding on to the list of positions set to expire next week, as that same challenge was present last week when looking for rollovers.

With sufficient cash to start the week I didn’t mind bringing the level down to about 20%. That would have meant 5 to 6 trades, but I just don’t believe that will end up being the case. I’m actually stunned that even three opening trades were made, but even those may have simply been done to try and fight off boredom.

One thing that I would like to see, but have now been waiting a while, is any kind of market commitment toward direction. That could be a higher or a lower direction, but at least a short term path. Maybe tomorrow, because today didn’t quite live up to that expectation.

This morning’s pre-open futures didn’t help to give much of an indication of any commitment, as moderation continued to be the theme. As so often has been the case lately, the early indication is for a slightly negative opening and most often that has gotten into the habit of leading to a meandering day.

And that’s exactly what today was.

With weeks as short as this one just about the only way to capture a reasonable premium on a weekly trade is to be able to make it fairly early in the week’s opening session, as the remaining time until expiration ticks away very quickly.

With some nice dividends this week it may simply be a good time to add to some of those positions, such as in JP Morgan and Bristol Myers, particularly as they trade off from their recent highs and their sectors may be in line for the next rotation, as that has continually been the market’s character as it reaches new highs but its component pieces aren’t always following along as you would normally expect.

That might make it a very easy kind of week.

But as usual, it’s not terribly often that a plan really goes as envisioned.

While clarity is always a nice thing to have I don’t think that vision will in any way be advanced this week.

Hopefully, there will at least be opportunity to generate some income, with or without much in the way of new purchases.

Daily Market Update – June 30, 2014 (9:00 AM)

A 3 1/2 day trading week that ends with the Employment Situation Report as many of the big boys head out to the Hamptons early to start the summer can make for a quiet trading week.

In volume, but not necessarily in outcome.

Other than some surprise that might be contained in the monthly numbers reported Thursday morning, there really isn’t much that should move markets, but you can never tell what kind of anomalous moves can be found during light volume trading.

While last week seems as if the market was already on vacation this week it definitely becomes reality and my expectation isn’t to be doing too much trading.

Coming off a forgettable week I would love to see a return to the ability to sell calls on existing positions rather than aggressively adding new positions. With only a handful of positions expiring this week and with premiums reflecting a much shorter week it may be challenging to find any opportunities that will expire this week. That may result in adding on to the list of positions set to expire next week, as that same challenge was present last week when looking for rollovers.

With sufficient cash to start the week I don’t mind bringing the level down to about 20%. That would mean 5 to 6 trades, but I just don’t believe that will end up being the case.

One thing that I would like to see, but have now been waiting a while, is any kind of market commitment toward direction. That could be a higher or a lower direction, but at least a short term path.

This morning’s pre-open futures aren’t helping to give much of an indication as moderation continues to be the theme. As so often has been the case lately, the early indication is for a slightly negative opening and most often that has gotten into the habit of leading to a meandering day.

With weeks as short as this one just about the only way to capture a reasonable premium on a weekly trade is to be able to make it fairly early in the week’s opening session, as the remaining time until expiration ticks away very quickly.

With some nice dividends this week it may simply be a good time to add to some of those positions, such as in JP Morgan and Bristol Myers, particularly as they tradeoff from their recent highs and their sectors may be in line for the next rotation, as that has continually been the market’s character as it reaches new highs but its component pieces aren’t always following along as you would normally expect.

That might make it a very easy kind of week.

But as usual, it’s not terribly often that a plan really goes as envisioned.

While clarity is always a nice thing to have I don’t think that vision will in any way be advanced this week.

Hopefully, there will at least be opportunity to generate some income, with or without much in the way of new purchases.

Daily Market Update – June 27, 2014 (8:30 AM)

The Week in Review will be posted by 6:00 PM and the Weekend Update will be posted by noon on Sunday:

Today’s possible outcomes include:

Assignment:  LVS

Rollover:  BBBY (puts),  DOW, MA

Expiration:   C, EBAY, HFC, PFE

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

Daily Market Update – June 26, 2014 (Close)

Yesterday was really a day that had government imprints on just about everything from before the opening bell until after the closing bell.

It started with a government decision regarding oil exports that significantly hurt the refiners across the board.

Then came the Supreme Court decision that may have killed off Aereo and its technology while boosting the networks and local broadcasters.

Finally, there came an IRS ruling in favor of Iron Mountains quest to be considered a REIT. That battle and open question had been going on for at least three years and the sudden spike in its option premiums suggested that some kind of decision was forthcoming.

It would otherwise likely have been a very quiet day if not for those stories that continue this morning with allegations by the New York State Attorney General against Barclays and its “dark pools,” Most people would believe that whether a violation of the law or not, Barclays wouldn’t be the only one involved.

Like they say, there’s usually more than one cockroach, so that may explain some weakness to all of the others that wouldn’t be likely to let a good scheme go unused. They certainly wouldn’t let Barclays be the only one to prosper from doing something of questionable ethics or legality.

The latter two of yesterday’s decisions were known to be coming, it just wasn’t exactly clear when they would be announced, nor what the decisions would be. The oil exporting rules came as a complete surprise, not just in timing, but in content, as well.

Ultimately, whether you’re on the right side of the wrong side of a government decision it’s an unsettling way to go about things. You really can’t get any closer to pure gambling as you’re fully dependent on a decision that is going to move markets in one direction or another, with very little chance of leaving the stock unchanged.

Even worse, there are no leaks or well placed rumors to give any ideas of what is to come. Watching SBGI in the days before the decision was released was pretty laughable as the shares alternated between going higher and going lower on multiple occasions on an intraday basis. People were simply guessing and rushing to place their bets.

While that may have been the case for IRM and SBGI, it wasn’t really part of the equation for those with positions in the oil refiners. Doing a quick glance at four of the major refiners there was a market capitalization d
ecline of more than $10 billion on yesterday’s unanticipated news and then its unexpected content.

Today doesn’t seem as if yesterday’s theme will have legs, as it’s a new day and one beginning to appear as if it will have no catalysts nor any new big stories, save what may further develop from the Attorney General’s office.

Unfortunately, lately bad news and the over the top reactions are much slower in rebounding than I can remember during any upward moving market.

While government intervention is certainly needed it can raise havoc with markets whether through direct intervention or indirect. It’s much easier to navigate the markets when the intervention is below the radar and more geared toward creating a liquid and credible environment for trading.

Yesterday was a bit heavy handed. In the case of Aereo, it’s not even very clear that the Justices understand technology nor considered the history of the development of television, its transmission and reception. Their decision, as reflected in Justice Breyer’s eyes, was as much about definitions and drawing parallels to existing models as through an interpretation of the law.

For those old enough to remember “rabbit ears.” the Aereo is essentially a  new iteration of rabbit ears that allows transmission through public airwaves to be delivered through an internet connection. They charge a monthly fee for that service. The broadcasters claim that they are pirating protected content and charging for that content.

Go back 60 years as television was being introduced and those broadcasts over the public airwaves were worthless without antennae. The only difference between Aereo and those antennae makers of days past is that the latter didn’t lease out their products. They sold them. Had they chosen to follow a leasing model today Aereo would be nothing more than a mobile version of an old product and sales model. You paid for the product that captured protected content back then and Aereo was just evolving the relationship to a new device, unforeseen 60 years ago.

But because the past was as it was the future will likely be deprived of a new technology and some businesses suffer and others prosper, as a result.

And investors, too.

Today, though, turned out to be one of those days that wasn’t any where near as bad as it could have been, as the market showed a nice recovery from early losses. Maybe that will have some legs and take us out for the week on a positive note.

At least today there was some opportunity to rollover some positions and get into decent position to maybe get some more accomplished tomorrow if there’s any residual strength left over to end the week.

Daily Market Update – June 26, 2014 (9:00 AM)

Yesterday was really a day that had government imprints on just about everything from before the opening bell until after the closing bell.

It started with a government decision regarding oil exports that significantly hurt the refiners across the board.

Then came the Supreme Court decision that may have killed off Aereo and its technology while boosting the networks and local broadcasters.

Finally, there came an IRS ruling in favor of Iron Mountains quest to be considered a REIT. That battle and open question had been going on for at least three years and the sudden spike in its option premiums suggested that some kind of decision was forthcoming.

It would otherwise likely have been a very quiet day if not for those stories that continue this morning with allegations by the New York State Attorney General against Barclays and its “dark pools,” Most people would believe that whether a violation of the law or not, Barclays wouldn’t be the only one involved.

The latter two of yesterday’s decisions were known to be coming, it just wasn’t exactly clear when they would be announced, nor what the decisions would be. The oil exporting rules came as a complete surprise, not just in timing, but in content, as well.

Ultimately, whether you’re on the right side of the wrong side of a government decision it’s an unsettling way to go about things. You really can’t get any closer to pure gambling as you’re fully dependent on a decision that is going to move markets in one direction or another, with very little chance of leaving the stock unchanged.

Even worse, there are no leaks or well placed rumors to give any ideas of what is to come. Watching SBGI in the days before the decision was released was pretty laughable as the shares alternated between going higher and going lower on multiple occasions on an intraday basis. People were simply guessing and rushing to place their bets.

While that may have been the case for IRM and SBGI, it wasn’t really part of the equation for those with positions in the oil refiners. Doing a quick glance at four of the major refiners there was a market capitalization decline of more than $10 billion on yesterday’s unanticipated news and then its unexpected content.

Today doesn’t seem as if yesterday’s theme will have legs, as it’s a new day and one beginning to appear as if it will have no catalysts nor any new big stories, save what may further develop from the Attorney General’s office.

While government intervention is certainly needed it can raise havoc with markets whether through direct intervention or indirect. It’s much easier to navigate the markets when the intervention is below the radar and more geared toward creating a liquid and credible environment for trading.

Yesterday was a bit heavy handed. In the case of Aereo, it’s not even very clear that the Justices understand technology nor considered the history of the development of television, its transmission and reception. Their decision, as reflected in Justice Breyer’s eyes, was as much about definitions and drawing parallels to existing models as through an interpretation of the law.

For those old enough to remember “rabbit ears.” the Aereo is essentially a  new iteration of rabbit ears that allows transmission through public airwaves to be delivered through an internet connection. They charge a monthly fee for that service. The broadcasters claim that they are pirating protected content and charging for that content.

Go back 60 years as television was being introduced and those broadcasts over the public airwaves were worthless without antennae. The only difference between Aereo and those antennae makers of days past is that the latter didn’t lease out their products. They sold them. Had they chosen to follow a leasing model today Aereo would be nothing more than a mobile version of an old product and sales model. You paid for the product that captured protected content back then and Aereo was just evolving the relationship to a new device, unforeseen 60 years ago.

But because the past was as it was the future will likely be deprived of a new technology and some businesses suffer and others prosper, as a result.

And investors, too.