Category Archives: Daily Market Update

Daily Market Update – February 23, 2016 (7:30 AM)

Yesterday was just like almost all of the rest of the days in 2016 and for many in 2015, too.

Oil went higher.

So stocks went higher.

Why oil went higher is anyone’s guess, as it was actually more than 7% higher at one point yesterday, with absolutely no change in anything in te supply – demand part of the equation.

While precious metals were lower yesterday, there was also a rebound in commodity prices, very notably in copper.

Those commodity price increases, if sustained, could be a big part of a justification to institute another interest rate increase.

Commodity cycles are often where it all begins, but there also has to be consumer demand and consumer ability to actually pay for the things that they demand.

With wages moving higher and unemployment falling and rents rising, you can see a scenario where demand for homes increases and basic building commodities follow.

Ordinarily the stock market would pounce on that kind of early news of an economy heating up, but recent past history says otherwise.

Maybe Friday’s GDP report will shed some light on what the consumer is demanding and paying for.

This morning the market looks as if it is going to give back some of yesterday’s gains, but again, 2 steps back for every 3 forward isn’t a bad way to get up the mountain.

That was the formula used last week and it wouldn’t be a bad idea to do the same this week if the summit is the goal.

While I’m not eager to trade when the market is showing a real move higher and prefer to do so on down days, I wouldn’t mind of few days of consolidation as an alternative and would make trades if some of the recent gains can be digested.

The fact that prices aren’t at the same bargain level that they were at a week ago doesn’t necessarily mean that they still aren’t at bargain levels, but a small sale would still be welcome or at least a slow down in the price increase.

With that in mind, I don’t think that I’ll be doing much today, but wouldn’t mind seeing some of yesterday’s big winners add to some of those gains, just to get a better opportunity to sell some calls on uncovered positions.

There were a number of trades that i was trying or at least hoping to make yesterday, so maybe today or tomorrow can become the day.

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Daily Market Update – February 22, 2016 (Close)

This week doesn’t have too much on the economic news front until we get to Friday and the GDP is released.

That report may be more important than usual as last week’s Consumer Price Index was suggesting upward price pressures which could justify an increase in interest rates.

While the CPI’s increase was mostly from health care costs and rents, if the GDP shows much in the way of a consumer led increase in demand, we could be set for the next small interest rate increase.

Based on the way the market has been behaving, that wouldn’t be a very good thing.

This morning, though, the market was behaving as it has for quite some time.

It’s just moving along with oil.

This morning those oil futures were sharply higher and so were stocks, as they dutifully followed without real regard as to the implication of oil getting more and more expensive.

With a little bit of cash generated from last week’s assignment, the very first for 2016 I would have been interested in adding some new positions but not with an impending 200 point gain in the DJIA this morning that became the real thing all throughout the trading session.

There was never even the slightest pretense of erasing the gain that came right out of the chute with the opening bell.

With no ex-dividend positions this week and with no positions to be rolled over nor assigned, I would have liked to have gotten something done, though, to generate some income.

In the meantime, I didn’t mind watching the market continue to go higher, but I would still prefer that it do so like it did last week and take some time to breathe and digest the gains.

Those gains have been considerable over the past week and could use some digesting.

Otherwise, I’m prepared for a quiet week, but would still welcome any opportunity to sell some calls on uncovered positions, even if that continues to mean looking at more distant expiration dates and trying to lock in some volatility enhanced premiums, dividends and maybe some capital gains on those shares, as well.

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Daily Market Update – February 22, 2016 (9:00 AM)

This week doesn’t have too much on the economic news front until we get to Friday and the GDP is released.

That report may be more important than usual as last week’s Consumer Price Index was suggesting upward price pressures which could justify an increase in interest rates.

While the CPI’s increase was mostly from health care costs and rents, if the GDP shows much in the way of a consumer led increase in demand, we could be set for the next small interest rate increase.

Based on the way the market has been behaving, that wouldn’t be a very good thing.

This morning, though, the market is behaving as it has for quite some time.

It’s just moving along with oil.

This morning those oil futures are sharply higher and so are stocks, as they dutifully follow without real regard as to the implication

With a little bit of cash generated from last week’s assignment, the very first for 2016 I would be interested in adding some new positions but not with an impending 200 point gain in the DJIA this morning.

With no ex-dividend positions this week and with no positions to be rolled over nor assigned, I would like to get something done, though, to generate some income.

In the meantime, I wouldn’t mind watching the market continue to go higher, but I would still prefer that it do so like it did last week and take some time to breathe and digest the gains.

Otherwise, I’m prepared for a quiet week, but would still welcome any opportunity to sell some calls on uncovered positions, even if that continues to mean looking at more distant expiration dates and trying to lock in some volatility enhanced premiums, dividends and maybe some capital gains on those shares, as well.

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

The Week in Review will be posted by 10 PM and the Weekend Update will be posted by Noon on Sunday.

The following trade outcomes are possible today:

Assignments:  EBAY

Rollovers: HPE

Expirations: F, UAL

The following were ex-dividend this week: AZN (2/17 $0.30)

The following are ex-dividend next week:  none

Trades, if any, will be attempted to be made prior to 3:30 PM EST

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Daily Market Update – February 18, 2016 (Close)

After yesterday’s gain, which came on top of Friday’s 300+ points and Tuesday’s 200+ points, February 2016 has gone from having started last week as even worse than January 2016 to actually being in the black.

That’s quite an achievement.

The real test is how the market handles such gaps higher.

798 points on the DJIA in just 3 trading sessions is pretty good by all measures.

What it has done is to bring the DJIA to some near term resistance.

While the S&P 500 is also at a near term resistance level, it does have another minor resistance level about 12 points higher.

After that, if you believe in charts, it’s do or die, as the next resistance level for both indexes is much higher.

On the DJIA it’s about 1200 points higher and for the S&P 500 it’s about 150 points higher.

What would be good would be to see the gains coming in smaller sizes and taking a day off every now and then to digest those gains.

But that would be the rational thing to do.

And today the market did the rational thing.

Although I had hoped that the gains would keep going for at least the final 2 days of the week.

Although it does look like there will finally be an assignment, the first in 2016, I’d love the idea of actually also being able to roll anything within the small number of expiring positions. Even going out a few months would be nice and also a nice change of pace.

Unfortunately,with the market taking the day off today, it wasn’t the time to find those opportunities popping up.

The futures were mildly higher this morning, with again, no real news to account for anything, although Asian markets were again nicely higher.

As the day progressed the market gave up its gains as oil led the way also giving up its gains.

The story seems to still be one of oil, but more and more the lessened possibility of increasing interest rates seems to be having a calming effect on traders.

At some point and I thought that point would have been here at least a quarter ago, there has to be some evidence that earnings are getting better in organic terms.

At some point there has to be a real reason for the market to go higher and not just on paradoxical reactions to bad news or from stock buybacks.

That would be nice, but I’ve waited a long time for the past to return.

In the stock market it usually does, but usually much more quickly than this macro-cycle has been doing.

For now, I’m still patient. Who knows, even oil may make some kind of a meaningful comeback.

Stranger things have happened.

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