Category Archives: Daily Market Update

Daily Market Update – March 31, 2014 (8:30 AM)

Nothing much happened over the weekend and so the markets continue with their non-committal trading in the pre-open to begin this week. That’s a pattern that has been going on for a while, even though as the days have unfolded there have been large, but usually alternating directional moves, including on intra-day bases.

While Secretary of State Kerry did have an unscheduled and lengthy meeting with his Russian counterpart on Sunday, it seems that the results of that meeting were the source of any non-committal sentiment this morning. I listened to the press conference and wasn’t really certain of what had been said and certainly there was no suggestion of accomplishment nor failure of those discussions, that could have served as catalysts for this morning.

Faced with lots of positions set to expire this week and coupled with a dearth of assignments last week, I’m a little more reluctant than usual to dip into reserves in order to open new positions. That money is there for real and screaming opportunities and there aren’t many of those, although their beginnings are becoming more evident, despite some advances in  last Friday’s trading. Sitting near all time highs, even with a slight hint of optimism to start the week isn’t enough of a motivator to dig too deeply, at least until seeing some evidence of stability and not the early positive opens that gave way to late morning selling, as we’ve been seeing lately.

Although this is also an Employment Situation Report week and that usually means a net positive for the weekly performance, it’s difficult to take that information and use it as a counter to common sense.

WIih so many expirations set for this week, this seems to be another week to consider looking for those opportunities that have expanded weekly options in an effort to diversify expiration dates.

As with last week I would like to see additional uncovered positions get their coverage and add to the week’s income stream. Where appropriate, that mean mean more DOH trades, as they have helped of late in having existing positions outperform the weekly market. If your goal is additional weekly premium income then it’s worth the additional attention that’s needed and the aggravation that may ensue when those shares mat suddenly spike. As long as they don’t do so immediately before expiration there’s always hope and even then there may be some.

This morning I plan to continue the strategy of sitting back a bit and watching to see how sentiment develops and where it may take us.

With cash reserves up to 37%, I’m willing to get down to about 25%, which may mean only as many as 4 tor 6 new positions for the week. Having rolled over a nice number of positions last week I’ve already met income objectives for this week, so there’s not as much additional reason to extend the portfolio, certainly not in order to chase income.

Sometimes that’s a luxury to begin the week, but you can’t necessarily blame anyone for wanting even more

Daily Market Update – March 28, 2014 (Close)

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

Daily Market Update – March 28, 2014 (7:30 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:

Assignment:

Rollover:  COP, MOS, TGT, VZ

Expiration:  AIG, C, FDO, FDO, WFM

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

Daily Market Update – March 27, 2014 (Close)

Interesting day today that ended up being much busier than I would have expected and in a good way, despite a market that basically did nothing all day.

With the day starting off with the discovery that my Walter Energy puts were assigned to me early. it wasn’t exactly a good start to the day, but I was still focused on news from the day before.

It’s not often that I end the day and then begin the new one being upset about things, but I’m still seething about yesterday afternoon’s news that Citigroup failed its banking stress test.

It’s not that I have a large position in Citigroup. It’s just a position, really no different from others in terms of overall proportion. I usually have either one, two or three lots of any stock and generally fairly well balanced, other than for speculative kind of positions, which are under-represented.

In this case, I have two lots of shares and was expecting that one would be assigned this Friday.

That seems much less likely right now.

That wasn’t supposed to happen and  I doubt that any apologists will step forward with anything to say other than it was pretty inexcusable, given that they had the precise guidelines of what needed to be done.

It was bad enough that nearly everybody else passed the test and started to immediately announce share buy backs and raised dividends. But what was really bad was that this stress test was the equivalent of an open book test.

How do you fail one of those?

While unwritten, there was a sort of social contract between investors that these “too big too fail banks” would pass their imposed stress tests and get back to their usual dividends and efforts to keep stock prices higher, through buy backs. In turn, investors bought shares.

Vikram Pandit, the previous CEO of CItigroup, was said to have been fired after not passing the previous stress test and criticized for not having been a “banking guy,” as he came from the hedge fund world.

His replacement, Michael Corbat, was known as a no nonsense guy with a reputation of delivering troubled banks to health.

Maybe not so much this time, although there’s still 30 days to appeal the decision.

Or, there’s always next time.

I probably wouldn’t advise using that in their next ad campaign.

This morning doesn’t hold much promise for moving the market higher and Citigroup isn’t helping things.

With less positions looking as if they may be assigned this week keeping some of the cash back may have been an unintended positive thing, as there is also suddenly less of a positive aura around the market.

It seems to simply be looking for direction.

I’m content to let it try and find its way and sit back while it goes through those efforts. At least in a couple of weeks an entirely new earnings season will be ready to begin and then we’ll have something a little more tangible to be basing decisions upon, rather than the vacuum of the past few days.

As it would turn out there really wasn’t much in the way of self-discovery today, but at least there were plenty of opportunities to generate some revenue through rollovers and outright call sales. That also makes for a less hectic day tomorrow and provides more opportunity to think about next week and the week after.

Hopefully, some of you have been following along and making the DOH trades and the less adevnturous, “mini-DOH” version trades. Sometimes they are a little bit of a nail biter kind of trade, because you really don’t want to see positions get assigned at a strike lower than the entry level, but bya and large, those premiums will and do add up. For me, at least, it’s worth the added anxiety.

Besides, I could use a few more gray hairs.

Daily Market Update – March 27, 2014 (9:30 AM)

It’s not often that I end the day being upset about things, but I’m still seething about yesterday afternoon’s news that Citigroup failed its banking stress test.

It’s not that I have a large position in Citigroup. It’s just a position, really no different from others in terms of overall proportion. I usually have either one, two or three lots of any stock and generally fairly well balanced, other than for speculative kind of positions, which are under-represented.

In this case, I have two lots of shares and was expecting that one would be assigned this Friday.

That seems much less likely right now.

That wasn’t supposed to happen and  I doubt that any apologists will step forward with anything to say other than it was pretty inexcusable, given that they had the precise guidelines of what needed to be done.

It was bad enough that nearly everybody else passed the test and started to immediately announce share buy backs and raised dividends. But what was really bad was that this stress test was the equivalent of an open book test.

How do you fail one of those?

While unwritten, there was a sort of social contract between investors that these “too big too fail banks” would pass their imposed stress tests and get back to their usual dividends and efforts to keep stock prices higher, through buy backs. In turn, investors bought shares.

Vikram Pandit, the previous CEO of CItigroup, was said to have been fired after not passing the previous stress test and criticized for not having been a “banking guy,” as he came from the hedge fund world.

His replacement, Michael Corbat, was known as a no nonsense guy with a reputation of delivering troubled banks to health.

Maybe not so much this time, although there’s still 30 days to appeal the decision.

Or, there’s always next time.

I probably wouldn’t advise using that in their next ad campaign.

This morning doesn’t hold much promise for moving the market higher and Citigroup isn’t helping things.

With less positions looking as if they may be assigned this week ke
eping some of the cash back may have been an unintended positive thing, as there is also suddenly less of a positive aura around the market.

It seems to simply be looking for direction.

I’m content to let it try and find its way and sit back while it goes through those efforts. At least in a couple of weeks an entirely new earnings season will be ready to begin and then we’ll have something a little more tangible to be basing decisions upon, rather than the vacuum of the past few days.