Category Archives: Daily Market Update

Daily Market Update – April 20, 2016 (Close)

Yesterday stocks were able to come back after giving up their triple point gain. The numbers were probably better than they appeared, with both the DJIA and S&P 500 being dragged down by a few really big declines after the report of earnings.

With earnings season still fresh, the theme is already beginning to shape up.

What we’re seeing so far is that the guidance from the previous quarter had really lowered expectations and as long as this quarter’s earnings reports are in the neighborhood, then investors wouldn’t run for the hills.

Maybe that’s why guidance for the following quarter continues to be less than optimistic.

So companies are generally presenting numbers better than expected, but still giving reduced guidance for the next quarter.

What economic expansion?

As oil is slowly heading higher on a net basis, with a series of large moves higher and large moves lower, at some point that new more expensive commodity has to weigh in on things.

You would think that to be the case, even as it never really seems to have weighed in while oil was heading lower and stayed there for the longest of times.

Even now, those prices seem to be a relative bargain, but no one is rejoicing in a tangible way by spending their money.

This morning markets recovered from their early morning losses in the futures and may find some reason to go higher, even as oil is again markedly weaker this morning.

But by now, those 2% moves seem small and inconsequential as they go back and forth with a net result of having been steadily moving higher since the low of about $26/barrel just a couple of months ago.

The new line in the sand is $40 and oil seems to be building a base in defense of that level.

In the meantime, the S&P 500 is barely 1.5% off from its all time highs, so it’s hard to really get an understanding of what anything means.

With earnings being mediocre and oil climbing higher, along with precious metals, maybe its the falling interest rate environment that’s feeding stocks.

But we all know that’s supposed to end. It’s just that the FOMC’s crystal ball has been really, really cloudy.

Mine hasn’t been better, but for now, I don’t mind going along for the ride, even if not trading too much.

That, too, will change.

Daily Market Update – April 19, 2016 (Close)

Yesterday stocks showed that they could go their own way apart from oil, oil oil’s rebound later in the day didn’t hurt things.

This morning’s futures had stocks and oil once again moving hand in hand, as what should have been the expected disappointment coming from Doha is going to be forgotten quickly.

Back in the days, OPEC was a real cartel and the countries comprising it were relatively united in their aim to squeeze the most out of the world.

That changed when Saudi Arabia decided it might be a bad idea to seriously injure the economies of the nations that actually buy your product. It also changed when Saudi Arabia saw other nations with increasing production, who found it necessary to keep production going to keep themselves in power.

It’s hard to have a cartel with any real influence when there is no real agenda anymore,

It’s also hard to artificially try to influence price when there are producers around the world who aren’t part of the club or won’t follow the edicts.

But this morning oil was again higher and WTI was again above $40 and likely to move higher, although with continued volatility.

It did move higher today, but stocks were ambivalent about following and gave up much of their earlier gain on the day.

Ultimately, it’s just a question of when stocks will come to the realization that more expensive oil shouldn’t really be a catalyst for higher stock prices, unless the oil price increase reflects real growth in demand.

But, that’s a question for another day.

For now, earnings are coming in and the market seems to be reasonably happy if lowered expectations are met and seems not to care about the less than optimistic guidance that is being delivered to date.

Today’s market wasn’t helped too much by IBM, but the broader S&P 500, which shouldn’t have been impacted as much as the DJIA by IBM’s weakness, had other issues to contend with, such as Google and Netflix.

I made one purchase yesterday and was ready to make an additional one yesterday and again today, but that one, too, was in the retail sector.

That gave me some reason for pause, because a few years ago I was overweight in retail and it took some time to dig out, so I’m not necessarily eager to be in the same position, as I’m now still overweight in oil and commodities and have been waiting the longest time to see some sunlight.

With a couple of positions set to expire this week and one ex-dividend position, I’d still like to generate some more income on the week, so I won’t yet put the wallet away.

On the other hand, I don’t mind the passivity, as long as it sees the market moving higher and pulling me along with it.

I’d be especially happy if some of the market’s move higher continues to be disproportionately based in oil and commodities, as that’s made 2016 a good year to date, just as it had made 2015 not such a good year. Today it was definitely weighted on that side of the equation, as oil and commodities continued their climb.

With volatility falling, there’s less reason to look at longer term option contracts at the moment, although I’d still love the opportunity to get some call sales on uncovered positions and may prefer to get something rather than just let those positions sit there and do nothing.

Daily Market Update – April 19, 2016 (7:30 AM)

Yesterday stocks showed that they could go their own way apart from oil, oil oil’s rebound later in the day didn’t hurt things.

This morning’s futures have stocks and oil once again moving hand in hand, as what should have been the expected disappointment coming from Doha is going to be forgotten quickly.

back in the days, OPEC was a real cartel and the countries comprising it were relatively united in their aim to squeeze the most out of the world.

That changed when Saudi Arabia decided it might be a bad idea to seriously injure the economies of the nations that actually buy your product. It also changed when Saudi Arabia saw other nations with increasing production, who found it necessary to keep production going to keep themselves in power.

It’s hard to have a cartel with any real influence when there is no real agenda anymore,

It’s also hard to artificially try to influence price when there are producers around the world who aren’t part of the club or won’t follow the edicts.

But this morning oil is again higher and WTI is again above $40 and likely to move higher, although with continued volatility.

It’s just a question of when stocks will come to the realization that more expensive oil shouldn’t really be a catalyst for higher stock prices, unless the oil price increase reflects real growth in demand.

That’s a question for another day.

For now, earnings are coming in and the market seems to be reasonably happy if lowered expectations are met and seems not to care about the less than optimistic guidance that is being delivered to date.

I made one purchase yesterday and was ready to make an additional one, but that one, too, was in the retail sector.

That gave me some reason for pause, because a few years ago I was overweight in retail and it took some time to dig out, so I’m not necessarily eager to be in the same position, as I’m now still overweight in oil and commodities and have been waiting the longest time to see some sunlight.

With a couple of positions set to expire this week and one ex-dividend position, I’d still like to generate some more income on the week, so I won’t yet put the wallet away.

On the other hand, I don’t mind the passivity, as long as it sees the market moving higher and pulling me along with it.

I’d be especially happy if some of the market’s move higher continues to be disproportionately based in oil and commodities, as that’s made 2016 a good year to date, just as it had made 2015 not such a good year.

With volatility falling, there’s less reason to look at longer term option contracts at the moment, although I’d still love the opportunity to get some call sales on uncovered positions and may prefer to get something rather than just let those positions sit there and do nothing.

Daily Market Update – April 18, 2016 (Close

The markets were buoyed last week by rumors that the world’s major oil producers, of course, not including the United States, were going to come to an agreement on reducing production.

That would have the intended result of increasing the price of oil, particularly as the issue seems to be supply related, rather than weak demand.

All of those oil ministers met on Sunday and just as was the case 2 months earlier, when markets exalted in news of a production cut, this one fell through, too.

On the ominous side, reportedly the new Saudi Arabian oil minister is a young and combative guy, who is willing to take great pain in order to inflict great pain.

The great pain he wants to inflict is upon Iran, who is responsible for each of the last two attempts to drop production having fallen through.

Unlike the last time, when the markets really expressed their unwarranted shock, this morning it seemed to be taking it all in stride.

It’s really hard to imagine that anyone really would have believed that Iran, after so many years of being limited in its sale of crude oil, would be now willing to take a cut, just as it is getting use to the flow of cash once again.

Hopefully, if oil continues lower, stocks won’t follow.

With crude oil down about 3% in the early trading, the muted response by stocks is a positive one, as the S&P 500 is, in a stealth sort of way, only about 3% away from its all time high.

Crude eventually recovered and stocks were reasonably healthy all throughout the session. It only took 20 minutes of trading at a loss before stocks turned positive and never looked back.

With a couple of assignments last week, I do have some additional cash to spend. With only one position as a potential rollover for the week and only one ex-dividend position, I wouldn’t have mind supplementing some of that income and was happy to actually make a trade.

With earnings getting underway with greater intensity this week and maybe with oil on the back burner, more emphasis could get placed on fundamentals.

Whether that’s good or bad is up for debate, but for now, the market seems to be accepting of earnings results that are mediocre, but still better than expected.

That’s usually what you do in life when your resolved to failure, but whatever works is fine by me.

Daily Market Update – April 18, 2016 (8:45 AM)

The markets were buoyed last week by rumpors that the world’s major oil producers, of course, not including the United States, were going to come to an agreement on reducing production.

That would have the intended result of increasing the price of oil, particularly as the issue seems to be supply related, rather than weak demand.

All of those oil ministers met on Sunday and just as was the case 2 months earlier, when markets exalted in news of a production cut, this one fell through, too.

On the oienous side, reportedly the new Saudi Arabian oil minister is a young and combative guy, who is willing to take great pain in order to inflict great pain.

The great pain he wants to inflict is upon Iran, who is responsible for each of the last two attempts to drop production having fallen through.

Unlike the last time, when the markets really expressed their unwarranted shock, this morning seems to be taking it in stride.

It’s really hard to imagine that anyone really would have believed that Iran, after so many years of being limited in its sale of crude oil, would be now willing to take a cut, just as it is getting use to the flow of cash once again.

Hopefully, if oil continues lower, stocks won’t follow.

With crude oil down about 3% in the early trading, the muted response by stocks is a positive one, as the S&P 500 is, in a stealth sort of way, only about 3% away from its all time high.

With a couple of assignments last week, I do have some addittional cash to spend. With only one position as a potential rollover for the week and only one ex-dividend position, I wouldn’t mind supplementing some of that income.

With earnings getting underway with greater intensity this week and maybe with oil on the back burner, more emphasis could get placed on fundamentals.

Whether that’s good or bad is up for debate, but for now, the market seems to be accepting of earnings results that are mediocre, but still better than expected.

That’s usually what you do in life when your resolved to failure, but whatever works is fine by me.