Category Archives: Daily Market Update

Daily Market Update – April 29, 2014 (Close)

Investing should be easy this week.

After all it’s an Employment Situation Report Week that also happens to have a Tuesday in it.When the morning started I thought this week may be an interesting one.

While the recent string of Tuesdays looks as if it will be getting off on a positive note, the Employment Situation Report string was broken last month by a mid-day strong reversal, but the trend still remains, as for nearly the past 2 years both the week of the report and the actual day have been significantly more likely to end up on the positive side.

What more can you ask?

Well, you could have asked for a triple digit gain or at least something close.

While this morning was looking to continue some of the very impressive rebound from yesterday’s final hour I’m not fully ready to follow those odds of history repeating itself. On the other hand, when I see a company like Coach, which has been a prisoner of history and pattern, once again take a sharp dive when reporting earnings, I am prone to wanting to follow that pattern again. That pattern has been a fairly good formula to follow, although it has required some patience before jumping in, so even that trade isn’t too likely today.

Of course, those were my thought in the morning before being adequately caffeinated. Staring at the Coach 2 year chart made it difficult to resist waiting, although sometimes it’s just best to ignore those urges.

Yesterday’s rebound really was impressive, although it’s not the first such to have occurred over the past couple of weeks. Normally, those kind of rebounds carry with them a very bullish kind of message, but those messages have become obscured and haven’t really found themselves to be accurate predictors of the market’s direction.

That direction has been equally obscure of late and market health has really been called into question as the NASDAQ, and especially the greatest of the “Momentum” stocks have come under attack.

Just as those had been sure things during their climbs higher, most every sure thing sees its time come to an end. In the case of these kind of high fliers it gets a little unnerving when the word “bubble” starts being tossed around with such great frequency.

Generally, the more that climb onto the bandwagon the more sense it makes to just walk, the bubble thing is often very prescient, because it’s just not talk, but it’s also recognition of a pattern. That is the sudden reversal of fortunes in stock moves among the faddiest of stocks and the size of those movements.

As with many stocks that see reversals, such as Coach, there’s enough of a history to suggest that shares will recover in some short time frame, or at least trade in a stable fashion at a new lower level. It’s usually not correct to refer to such stocks as value traps, because their value tends to return or be re-established.

But in the case of these high fliers, there is no such individual history. Yet people believe that when they experience large drops it’s a chance to get in at a reasonable price.

History shows that many of these don’t recover and when taken in their totality, they may be a harbinger for things to come in the broader market.

As I mentioned yesterday, this will be an interesting week.

Yesterday was an appropriate start for that kind of a week and there’s more to come as earnings start coming our way.

Stay tuned and stay patient.



Daily Market Update – April 29, 2014 (9:30 AM)

Investing should be easy this week.

After all it’s an Employment Situation Report Week that also happens to have a Tuesday in it.When the morning started I thought this week may be an interesting one.

While the recent string of Tuesdays looks as if it will be getting off on a positive note, the Employment Situation Report string was broken last month by a mid-day strong reversal, but the trend still remains, as for nearly the past 2 years both the week of the report and the actual day have been significantly more likely to end up on the positive side.

What more can you ask?

While this morning is looking to continue some of the very impressive rebound from yesterday’s final hour I’m not fully ready to follow those odds of history repeating itself. On the other hand, when I see a company like Coach, which has been a prisoner of history and pattern, once again take a sharp dive when reporting earnings, I am prone to wanting to follow that pattern again. That pattern has been a fairly good formula to follow, although it has required some patience before jumping in, so even that trade isn‘t too likely today.

Yesterday’s rebound really was impressive, although it’s not the first such to have occurred over the past couple of weeks. Normally, those kind of rebounds carry with them a very bullish kind of message, but those messages have become obscured and haven’t really found themselves to be accurate predictors of the market’s direction.

That direction has been equally obscure of late and market health has really been called into question as the NASDAQ, and especially the greatest of the “Momentum” stocks have come under attack.

Just as those had been sure things during their climbs higher, most every sure thing sees its time come to an end. In the case of these kind of high fliers it gets a little unnerving when the word “bubble” starts being tossed around with such great frequency.

Generally, the more that climb onto the bandwagon the more sense it makes to just walk, the bubble thing is often very prescient, because it’s just not talk, but it’s also recognition of a pattern. That is the sudden reversal of fortunes in stock moves among the faddiest of stocks and the size of those movements.

As with many stocks that see reversals, such as Coach, there’s enough of a history to suggest that shares will recover in some short time frame, or at least trade in a stable fashion at a new lower level. It’s usually not correct to refer to such stocks as value traps, because their value tends to return or be re-established.

But in the case of these high fliers, there is no such individual history. Yet people believe that when they experience large drops it’s a chance to get in at a reasonable price.

History shows that many of these don’t recover and when taken in their totality, they may be a harbinger for things to come in the broader market.

As I mentioned yesterday, this will be an interesting week.

Yesterday was an appropriate start for that kind of a week and there’s more to come as earnings start coming our way.

Stay tuned and patient.

Daily Market Update – April 28, 2014 (Close)

When the morning started I thought this week may be an interesting one.

Well, if today is an indication, I’ve had enough interesting stiff to last me for the week.

The movements today wewn’t the kind that we see very often. Where the market got back its confidence in the final hour is really a mystery.

For starters, nothing happened over the weekend on the international scene, as was the fear on Friday and may have accounted for the weakness to end last week. Even those used to having seen these kind of brinksmanship games may have thought that something, perhaps unintentional, was going to result in an adverse event and subsequent fall-out in the markets.

So without that overhang it’s getting off to a push higher with word of increased merger and buy out activity and a sense of relief. The relief, could still, however, be short-lived..

Then later in the week are the FOMC announcement and the Employment Situation Report. The last time around both of those saw surprising strong turnaround sell-offs following initially positive responses. In both cases neither the initial responses nor the reversals were very rational because neither really introduced any new news.

Also this morning, just before the opening bell came word that some further sanctions will be levied against Russia, but like the previous ones, they are directed toward individuals, so it remains to be seen how the market looks at them. Basically, the more biting the sanctions the more bearish the market reaction.

This is another week that I would be content to let prices move higher even if that was without much in the way of new purchases for the week. I would like to see the higher prices open up opportunities to just sell more calls on existing positions.

As with some previous weeks, with enough positions set to expire this Friday, where possible I’d like to begin populating next week or even the monthly expiration with expiring contracts, rather than adding to the already lengthy list this week.

With a handful of assignments my cash reserves are higher but they are so after coming off from a recent low point. I would very much like to see that level get even higher so I’m not likely to chase after new positions and may return to the low level of buying activity from two and three weeks ago.

As long as there are opportunities to generate income from existing positions that’s acceptable, but only for so long.

With the market pointing toward a higher open this morning I will sit and see if it has any legs before getting overly excited. With news of some additional sanctions against Russia will certainly come some response which may have its own impact, so I plan to tread softly this morning.

After a few weeks of really nothing going on it’s actually nice to see some many different factors entering into the equation, although I may end up regretting that feeling, as sometimes boredom is better than unnecessary excitement.

While anything can bring opportunity too much of the unknown isn’t something that really benefits anyone.

Hopefully some clarity and some rational thought returns to the market and lets it simply concentrate on earnings and fundamentals, although hoping for that may itself be fairly irrational, given past history.

Today’s market did nothing to add to the clarity but at least you have to have a little more confidence heading into tomorrow after the really nice reversal of the reversal.

Then again, there’s always tomorrow to throw a wrench into well thought out plans, but it is a Tueday and we all know what that means.

Daily Market Update – April 28, 2014 (9:45 AM)

This week may be an interesting one.

For starters, nothing happened over the weekend on the international scene, as was the fear on Friday and may have accounted for the weakness to end last week. Even those used to having seen these kind of brinksmanship games may have thought that something, perhaps unintentional, was going to result in an adverse event and subsequent fall-out in the markets.

So without that overhang it’s getting off to a push higher with word of increased merger and buy out activity and a sense of relief. The relief, could still, however, be short-lived..

Then later in the week are the FOMC announcement and the Employment Situation Report. The last time around both of those saw surprising strong turnaround sell-offs following initially positive responses. In both cases neither the initial responses nor the reversals were very rational because neither really introduced any new news.

Also this morning, just before the opening bell came word that some further sanctions will be levied against Russia, but like the previous ones, they are directed toward individuals, so it remains to be seen how the market looks at them. Basically, the more biting the sanctions the more bearish the market reaction.

This is another week that I would be content to let prices move higher even if that was without much in the way of new purchases for the week. I would like to see the higher prices open up opportunities to just sell more calls on existing positions.

As with some previous weeks, with enough positions set to expire this Friday, where possible I’d like to begin populating next week or even the monthly expiration with expiring contracts, rather than adding to the already lengthy list this week.

With a handful of assignments my cash reserves are higher but they are so after coming off from a recent low point. I would very much like to see that level get even higher so I’m not likely to chase after new positions and may return to the low level of buying activity from two and three weeks ago.

As long as there are opportunities to generate income from existing positions that’s acceptable, but only for so long.

With the market pointing toward a higher open this morning I will sit and see if it has any legs before getting overly excited. With news of some additional sanctions against Russia will certainly come some response which may have its own impact, so I plan to tread softly this morning.

After a few weeks of really nothing going on it’s actually nice to see some many different factors entering into the equation, although I may end up regretting that feeling, as sometimes boredom is better than unnecessary excitement.

While anything can bring opportunity too much of the unknown isn’t something that really benefits anyone.

< p>Hopefully some clarity and some rational thought returns to the market and lets it simply concentrate on earnings and fundamentals, although hoping for that may itself be fairly irrational, given past history.