Category Archives: Daily Market Update

Daily Market Update – April 28, 2016 (7:30 AM)

Yesterday, the market reacted positively to the FOMC Statement release.

Going from a mildly negative position to a mildly positive position pretty much reflected what was in that FOMC Statement.

Essentially, there was nothing, which itself wasn’t a surprise.

That was some suggestion of confidence in the path of the economy, which then ignited talk of a June 2016 interest rate increase.

This morning’s GDP may give some clues as to how much the consumer is actually participating, but based on this morning’s futures, the market isn’t in a buying mood.

Oil, for a change, doesn’t appear to be a precipitating factor.

It’s absolutely flat to begin the morning, as the DJIA futures are down triple digits, with lots of earnings to come this morning.

With the week nearing its end, I now just hope to be able to see my lone expiring position either get assigned or rolled over.

I continue not minding seeing some of those positions get rolled over, even if their in the money, rather than assigned.

Even as volatility falls, the rollover premiums are often good enough for select positions to make that a more lucrative, and perhaps less risky venture, than trying to find a new place to park money.

On the other hand, I wouldn’t mind parking some money in cash, even as the market hasn’t been swooning.

For now, it’s been mostly oil and commodities that have really lead the way for 2016, just as they led the other way for 2015.

With that going on, I don’t mind being on the long side for a change and am happy to continue watching those positions move higher, even as they really don’t spell anything good for the broader market nor for the economy.

Daily Market Update – April 27, 2016 (Close)

The market was fairly boring during yesterday’s regular trading session, only moving in a range of about 100 points all day long.

The fireworks may have started after the closing bell with some big disappointments in earnings.

Those may be mollified this morning in the futures as oil was again up in the 2-3% range.

Later, the really big news could have come as the FOMC Statement was released and we could all wonder about the nuanced meanings behind each and every word.

Instead, the market traded in a range of only 150 points as no one was expecting the announcement of a rate increase, especially after the Atlanta Federal Reserve lowered its GDP forecast last month, but you never can know.

The FOMC didn’t change rates, but they did suggest the economy was worthy of their confidence.

Whatever that may mean.

Apparently, no one really knew, but the overall idea was that whatever happened wasn’t bad.

Maybe it was even good.

Tomorrow we have a GDP release, as well, and we may get some better insight into what the consumer is doing with all of that extra money coming from increased employment, living wages and lower oil prices.

So far, the answer has been a big, fat, “nothing.”

That’s also about how much I’ve done this week when it comes to trading, but some of the overnight declines in those reporting earnings last night could have made the morning an attractive one as the morning got ready for trading.

Oil, though, saved the day.

Part of this week’s strategy heading into the week was to consider some of those positions if they did fare poorly when announcing earnings.

In those cases, the hope is that the decline is an over-reaction and not the tip of the iceberg.

So often, the put premiums on such stocks are still very high, as the expectation is for the other shoe to drop.

With the FOMC looming overhead, though, there may have been reason to wait to consider any trade until after the announcement, so as to not also get caught up in a general market downdraft.

Ultimately, it didn’t matter. But if you are still long oil and commodities, it was another good day.

Daily Market Update – April 27, 2016 (7:30 AM)

The market was fairly boring during yesterday’s regular trading session, only moving in a range of about 100 points all day long.

The fireworks may have started after the closing bell with some big disappointments in earnings.

Those may be mollified this morning in the futures as oil is again up in the 2-3% range.

Later, the really big news may come or not come, as the FOMC Statement is released and we can all wonder about the nuanced meanings behind each and every word.

No one is expecting the announcement of a rate increase, especially after the Atlanta Federal Reserve lowered its GDP forecast last month, but you never know.

Tomorrow we have a GDP release, as well, and we may get some better insight into what the consumer is doing with all of that extra money coming from increased employment, living wages and lower oil prices.

So far, the answer has been a big, fat, “nothing.”

That’s also about how much I’ve done this week when it comes to trading, but some of the overnight declines in those reporting earnings last night may start becoming attractive as the morning gets ready for trading.

Part of this week’s strategy heading into the week was to consider some of those positions if they did fare poorly when announcing earnings.

In those cases, the hope is that the decline is an over-reaction and not the tip of the iceberg.

So often, the put premiums on such stocks are still very high, as the expectation is for the other shoe to drop.

With the FOMC looming overhead, though, there may be reason to wait to consider any trade until after the announcement, so as to not also get caught up in a general market downdraft.

Daily Market Update – April 26, 2016 (Close)

The market recovered nicely from a big loss yesterday as oil and commodities gave back some of the big gains they’ve made over the past two weeks.

Heading into Wednesday’s FOMC Statement release, you might have had reason to suspect that trading would be pretty quiet, but there’s still the matter of oil and lots of important earnings announcements this week.

This morning, the market again looked as if it will open flat, just as it looked yesterday, but some earnings are coming in that aren’t terrible.

That’s the way the bar is set right now.

The expectation is for terrible and if it’s anything better, well then there’s reason for exaltation.

This morning, not all of those numbers have looked better than the expectations, but more importantly, some companies were giving better guidance.

When oil companies start to give better guidance, such as BP did this morning, there’s reason for some excitement, even if their guidance is heavily dependent on workforce reductions.

History has shown that the market rewards those kind of things, even as they are bad for the overall economy.

Microeconomics versus macroeconomics.

It’s a story as old as Cain and Abel.

This morning’s flat market came the day before the FOMC Statement release, which for the past couple of years has been a day for markets to move strongly higher.

That wasn’t the case last month and may no longer be the case, as the countdown for an interest rate increase is really on full alert.

The market stayed flat all day, with the DJIA trading in a 100 point range.

While oil made a big move higher today, the market didn’t follow suit.

I have some money to spend this week and am still considering doing so, but am torn between the risk of earnings and the lure of dividends.

That’s a story as old as Cain and Abel, too.

This morning’s futures did have oil weaker, but the market wasn’t following very closely. It now seems to be more reactive to larger kind of moves in oil, but today’s big move higher didn’t do the trick.

Oil now appears to be getting comfortable above $40 and the next level that had to be broken was $45.

After today, sights are beginning to get set on $50

At some point, someone is going to look at increase gasoline prices, up about $0.08 last week and make note of how that’s going to hurt the summer travel season.

True, but logic hasn’t worked any of the way down in the price, so we’ll see what role logic may play if the optimistic outlook for the price of oil is correct.

I, for one, who suffered on the way down, would like to see the association continue, even if it is illogical.

With a few ex-dividend positions this week, one potential rollover and the sale of calls on an uncovered position, I’d still like to see some more activity this week.

The idea of a surprise from the FOMC doesn’t seem too likely, but I assume that they use very different criteria than the rest of us when interpreting data, especially the data that we don’t have access to, yet.

Such as Thursday’s GDP.

Meanwhile, the stiff wind before tomorrow’s FOMC may come from earnings releases after the market’s close, as there were some big and prominent losers that may catch some by surprise tomorrow morning, as one man’s buying opportunity is another man’s need to sell.

Daily Market Update – April 26, 2016 (7:30 AM)

The market recovered nicely from a big loss yesterday as oil and commodities gave back some of the big gains they’ve made over the past two weeks.

Heading into Wednesday’s FOMC Statement release, you might have had reason to suspect that trading would be pretty quiet, but there’s still the matter of oil and lots of important earnings announcements this week.

This morning, the market again looks as if it will open flat, just as it looked yesterday, but some earnings are coming in that aren’t terrible.

That’s the way the bar is set right now.

The expectation is for terrible and if it’s anything better, well then there’s reason for exaltation.

This morning, not all of those numbers have looked better than the expectations, but more importantly, some companies are giving better guidance.

When oil companies start to give better guidance, such as BP did this morning, there’s reason for some excitement, even if their guidance is heavily dependent on workforce reductions.

History has shown that the market rewards those kind of things, even as they are bad for the overall economy.

Microeconomics versus macroeconomics.

It’s a story as old as Cain and Abel.

This morning’s flat market comes the day before the FOMC Statement release, which for the past couple of years has been a day for markets to move strongly higher.

That wasn’t the case last month and may no longer be the case, as the countdown for an interest rate increase is really on full alert.

I have some money to spend this week and am still considering doing so, but am torn between the risk of earnings and the lure of dividends.

That’s a story as old as Cain and Abel, too.

This morning’s futures do have oil weaker, but the market isn’t following very closely. It now seems to be more reactive to larger kind of moves in oil.

Oil now appears to be getting comfortable above $40 and the next level that has to be broken is $45.

At some point, someone is going to look at increase gasoline prices, up about $0.08 last week and make note of how that’s going to hurt the summer travel season.

True, but logic hasn’t worked any of the way down in the price, so we’ll see what role logic may play if the optimistic outlook for the price of oil is correct.

I, for one, who suffered on the way down, would like to see the association continue, even if it is illogical.

With a few ex-dividend positions this week, one potential rollover and the sale of calls on an uncovered position, I’d still like to see some more activity this week.

The idea of a surprise from the FOMC doesn’t seem too likely, but I assume that they use very different criteria than the rest of us when interpreting data, especially the data that we don’t have access to, yet.

Such as Thursday’s GDP.