Category Archives: Daily Market Update

Daily Market Update – May 25, 2016 (7:30 AM)

No one expected yesterday;s New Home Sales surprise to the upside.

Neither did anyone expect that the New Home Sales Report would have much significance, as it has mostly been a yawner for the past few years.

In addition to some really strong numbers, with an increase of about 20% over expectations, the avarage price for a new home was significantly higher and was more in the range of the higher end home builders.

That’s either good or bad, depending on your perspective.

If you’re Bernie Sanders, it may be reflective of the skew in society, in that the increase didn’t represent first time home buyers joining in on the “American Dream,” but rather it was those already living the dream who were moving forward and leaving others further and further behind.

Others see it as good news and showing more consumer participation in the economy which will filter down to things like home furnishings, appliances and all of those other things that are part and parcel of owning a new home.

This morning the futures are cautiously higher following that large gain yesterday and there is some more good earnings news from after the close yesterday to perhaps support some of those gains.

I’m just happy to have actually made a trade and even rolling it over in order to capture the dividend.

With that done, there may not be much else to do for the rest of the week, although I’ll be on the lookout for any trading opportunities, especially if it means getting some income out of non-performing positions.

With next week being a shortened trading week there may not be too much to do then either, but at least next week has a couple of expiring positions and a decent number of ex-dividend positions that will generate some income to make it worth getting out of bed while we await what the FOMC will do and keep watching the price of oil move higher into the summer.

Daily Market Update – May 24, 2016 (Close)

For the next few weeks we are likely to hear more and more about how the data coming in will or won’t support FOMC action to raise interest rates.

The torrent began last week and has continued through this past weekend and the beginning of this trading week.

However, that torrent hasn’t been on the back of any data, but more on the backs of the utterances of various Federal Reserve Governors.

Whether they are getting everyone prepared for a June 2016 increase or simply giving traders enough time to digest the news so that there won’t be any great upheaval in markets for either a June or a July increase is subject to speculation.

But there’s probably no sense in denying that the Federal Reserve members think about a lot more things than they ever used to, include foreign markets and the US stock market.

Purists will say that the focus of the Federal reserve should be purely upon their mandates and not get blurred by other factors, but the reality is that everything matters, including politics and public opinion.

It does seem that the FOMC is playing more and more of a game while taking temperatures of various constituencies and stakeholders.

Yesterday the market was faced with declining oil and the increasing likelihood that interest rates were going to increase, perhaps as early as next month.

To its credit, the market did well to end the day absolutely flat, especially when you realize that it was never really in the hole.

This morning the futures were pointing a little bit higher as a few more consumer related earnings reports come in for the week.

The big ticket item, though, will come on Friday as the GDP is released, but it may not end up being as important as today’s New Home Sales.

That report hasn’t been all that important lately, but it really came in strongly today, especially at the higher end of the market.

That sent the market soaring, just like it used to in the old days.

After the close some more decent technology earnings may help the market tomorrow,

After that everyone will be waiting for the GDP and its revisions to see whether the FOMC really has anything to support all of the newly found hawkish tone. Today’s New Hosing data does support the idea, though.

I had been expecting that this was going to be a very quiet week for me, although I still wasn’t opposed to spending down some of my limited cash.

And so I did in the hunt for a dividend and then rolled the position over to either get more premium in exchange for the dividend or more premium and the dividend.

We’ll see how that works out tomorrow morning, but I’d be happy for an early assignment, although I don’t think it too likely.

With next week being a holiday shortened trading week and only a single position set to expire, I still wouldn’t mind adding something and perhaps using the June 3rd expiration date to get some additional premium for the effort.

Otherwise, it may just be a case of sitting and listening and trying to figure out how the market will interpret any kind of news.

I think it’s time to take news on its face value and to stop playing the various games.

Both FOMC members and traders need to grow up.

Daily Market Update – May 24, 2016 (8:00 AM)

For the next few weeks we are likely to hear more and more about how the data coming in will or won’t support FOMC action to raise interest rates.

The torrent began last week and has continued through this past weekend and the beginning of this trading week.

However, that torrent hasn’t been on the back of any data, but more on the backs of the utterances of various Federal Reserve Governors.

Whether they are getting everyone prepared for a June 2016 increase or simply giving traders enough time to digest the news so that there won’t be any great upheaval in markets for either a June or a July increase is subject to speculation.

But there’s probably no sense in denying that the Federal Reserve members think about a lot more things than they ever used to, include foreign markets and the US stock market.

Purists will say that the focus of the Federal reserve should be purely upon their mandates and not get blurred by other factors, but the reality is that everything matters, including politics and public opinion.

It does seem that the FOMC is playing more and more of a game while taking temperatures of various constituencies and stakeholders.

Yesterday the market was faced with declining oil and the increasing likelihood that interest rates were going to increase, perhaps as early as next month.

To its credit, the market did well to end the day absolutely flat, especially when you realize that it was never really in the hole.

This morning the futures are pointing a little bit higher as a few more consumer related earnings reports come in for the week.

The big ticket item, though, will come on Friday as the GDP is released.

Everyone will be watching it and its revisions to see whether the FOMC really has anything to support all of the newly found hawkish tone.

I expect that this is going to be a very quiet week for me, although I still am not opposed to spending down some of my limited cash.

With next week being a holiday shortened trading week and only a single position set to expire, I wouldn’t mind adding something and perhaps using the June 3rd expiration date to get some additional premium for the effort.

Otherwise, it may just be a case of sitting and listening and trying to figure out how the market will interpret any kind of news.

I think it’s time to take news on its face value and to stop playing the various games.

Both FOMC members and traders need to grow up.

Daily Market Update – May 23, 2016 (Close)

This week began with far fewer earnings reports to give us much to think about, but it does have lots of Federal Reserve Governors with little to do, other than to give speeches and make appearances.

In all likelihood they will continue to add to the belief that an interest rate hike could happen in June, but they could just simply be setting the table for a July increase. Yesterday and today, though, they really seemed to be taunting investors, saying that the rate hike could come before it was obvious that it was warranted.

That sounds just like the case back in the final months of 2015 and we’re still waiting for the obvious to make itself known.

Meanwhile, even as earnings reports are slowing down, there will be a GDP release on Friday and it comes just as the market gets ready for a 3 day holiday weekend,

So what could possibly go wrong as the June 2016 option cycle gets ready to begin?

Let’s see.

Federal Reserve Governors talking like hawks coupled with a stronger than expected GDP after a couple of months of disappointing figures could easily put the market in a bad mood.

That is, as long as they still think that early signs of economic expansion is really bad news.

With the retailers having given their own disappointing news, it is a little difficult to see just where the expansion is coming from if the consumer isn’t participating.

With continued reassurance that the FOMC will be led by data you might think that a June rate hike would be unlikely, but now, for those who deal in odds, the talk is that there is now a 30% chance of a June rate hike.

That changed from less than 5% barely a week ago and that was this morning before more hawkish words hit the news feed.

So as more uncertainty is here to start the week, I have some money to spend after a couple of assignments on Friday.

With 2 ex-dividend positions this week, each with 2 lots of shares, I would still like to see a chance of generating some more income, but there isn’t very much to give some confidence, unless the market does decide to interpret the likelihood of that interest rate hike as being good news.

At the same time, if oil continues to move higher, but because of contracting supply, you would also have to believe that the market would take that as a negative, but that hasn’t been the case in 2016, so it still remains anyone’s guess how the market will balance competing and conflicting factors.

There are a number of positions that I do find attractive heading into this week, but I’m not entirely convinced that i do want to spend the money unless seeing some sign of a rational market.

That may be a tall order.

Today there was no reason to buy into either side of any argument as the market traded in a very narrow range and finished the day virtually unfinished.

Considering a little bit of weakness in oil, maybe the final close was a bullish sign or maybe not.

Daily Market Update – May 23, 2016 (8:15 AM)

This week begins with far fewer earnings reports to give us much to think about, but it does have lots of Federal Reserve Governors with little to do, other than to give speeches and make appearances.

In all likelihood they will add to the belief that an interest rate hike could happen in June, but they could just simply be setting the table for a July increase.

Meanwhile, even as earnings reports are slowing down, there will be a GDP release on Friday and it comes just as the market gets ready for a 3 day holiday weekend,

So what could possibly go wrong as the June 2016 option cycle gets ready to begin.

Let’s see.

Federal Reserve Governors talking like hawks coupled with a stronger than expected GDP after a couple of months of disappointing figures could easily put the market in a bad mood.

That is, as long as they still think that early signs of economic expansion is really bad news.

With the retailers having given their own disappointing news, it is a little difficult to see just where the expansion is coming from if the consumer isn’t participating.

With continued reassurance that the FOMC will be led by data you might think that a June rate hike would be unlikely, but now, for those who deal in odds, the talk is that there is now a 30% chance of a June rate hike.

That changed from less than 5% barely a week ago.

I have some money to spend after a couple of assignments on Friday.

With 2 ex-dividend positions this week, each with 2 lots of shares, I would still like to see a chance of generating some more income, but there isn’t very much to give some confidence, unless the market does decide to interpret the likelihood of that interest rate hike as being good news.

At the same time, if oil continues to move higher, but because of contracting supply, you would also have to believe that the market would take that as a negative, but that hasn’t been the case in 2016, so it still remains anyone’s guess how the market will balance competing and conflicting factors.

There are a number of positions that I do find attractive heading into this week, but I’m not entirely convinced that i do want to spend the money unless seeing some sign of a rational market.

That may be a tall order.