Category Archives: Daily Market Update

Daily Market Update – November 19,  2015  (7:30 PM)

Yesterday was a big surprise.

There were 2 things that happened that made it an impressive day.

The first was the manner in which the market reacted to the release of last month’s FOMC minutes, which indicated a much more hawkish tone and one that made it pretty clear that the intent was to raise interest rates soon.

That the market didn’t run away in terror was a good sign.

There was already some word that would be the news in the minutes and that may have been the reason that the market had opened with some strength heading into the official release at 2 PM.

It was, however, at 2:04 PM that the market really took off and moved higher and higher.

While it may have been the official release of the minutes that was the proximal cause of the further rally, perhaps coincidentally, it occurred just as the DJIA had fallen to and successfully tested the 17600 level, which proved to be a resistance point on Tuesday.

Yesterday, after testing that point for just a moment, and again, perhaps coincidentally, the market turned a decent gain into a really nice one.

With some decent earnings for the week and a more mature look at what interest rate increases might mean at such an early stage, there’s some hope that the market will be able to maintain this forward momentum as the monthly option cycle is getting ready to come to its end.

There are some more earnings reports for this week and for this current cycle, but we are now near the end of the ones that really matter for the broader market and so we may begin to fall into that more quiet time of the year when most talk starts centering on retailers and their holiday sales.

Using the past as a guide, that typically means considering adding retailers in advance of the official start of the season and holding on through the end of that season, as the script is usually fairly consistent.

Expectations are usually low and results are usually better than expected.

That tends to be a good formula for buying and selling.

But that might be easier to do if the market maintains its strength this week and allows for some assignments of some existing positions and creating some freed up cash to recycle into that sector, where appropriate.

For now, it may just be a case of sitting back for these last two days of the cycle and see where the opportunities arise.

Daily Market Update – November 18,  2015  (Close)

Yesterday was a disappointing day, as it looked as if the market was building nicely on the surprising gains from Monday.

As has been the case on a number of occassions over the past month, the market just seemed to stop dead in its tracks and then headed the other way.

In this case there really was no news, nor were there any of the technical factors that people like to point toward when explaining sudden changes in behavior.

The third reason so frequently given, and is most likely the one that has some validity, is that programmatic selling took hold.

That’s the same as saying “I don’t really know what happened, so we’ll blame it on something unseen.”

But it makes sense and a single large sell order could be the trigger for others looking closely at price movements and trading volume,

This morning, maybe not too surprisingly, showed a somewhat confused futures market. It really didn’t seem to know what it wanted to do and there wasn’t likely to be very much news coming today, at least not planned news to help the market decide.

When that’s the case it can be a situation of “follow the leader” as yesterday’s turnaround may have been and fear and greed become more important than facts and fundamentals.

But if you recall yesterday, the turnaround on a dime occurred at the DJIA 17600 level.

Today, the market actually started a slow climb higher from the open, as the futures showed some late improvement.

Then the DJIA passed the 17600 mark and promptly fell back toward it in a test.

But as it did, it really found some support there and then just went off like a rocket, again the big move started right around 2 PM.

The earlier move higher, starting prior to the opening, came as the FOMC minutes from last month were released and the talk was all hawkish.

Now it seems as if traders have again come to their good senses and realize that a small rate increase can’t be a bad thing.

With some more earnings coming this week, there’s some hope that the news from Home Depot and Wal-Mart will be more reflective of what’s going on than has been the case with Macy’s and Nordstroms, although you do have to wonder what the meaning may be if the lower end of retail is picking up and the middle and higher ends are struggling.

Generally, in the past, increases in employment statistics and wages have seen relative decreases at Wal-Mart and the dollar stores and more shopping at the aspirational kind of stores, like Target and Kohls.

But maybe in a really protracted period of poor job numbers, Wal-Mart may be aspirational for those that haven’t had employment for far too long of a time.

That both Home Depot and Lowes reported good earnings is at least a positive bit of news, but there still has to be validation from others that there is truly something at hand pointing toward an expansion of the economy at the level of housing.

For the rest of the week, I don’t think I’ll be spending any more money. I did enjoy watching shares just move higher and erase some of the real unwarranted declines of last week

I’m hopeful that the final days of the week will see some support for those positions expiring on Friday. So far, this week does give that hope,

My preference would be to see assignments, but as always, I wouldn’t turn my back on any rollovers.

Daily Market Update – November 18,  2015  (7:30 AM)

Yesterday was a disappointing day, as it looked as if the market was building niceley on the surprising gains from Monday.

As has been the case on a number of occassions over the past month, the market just seemed to stop dead in its tracks and then headed the other way.

In this case there really was no news, nor were there any of the technical factors that people like to point toward when explaining sudden changes in behavior.

The third reason so frequently given, and is most likely the one that has some validity, is that programmatic selling took hold.

That’s the same as saying “I don’t really know what happened, so we’ll blame it on something unseen.”

But it makes sense and a single large sell order could be the trigger for others looking closely at price movements and trading volume,

This morning, maybe not too surprisingly, shows a somewhat confused futures market. It really doesn’t know what it wants to do and there isn’t likely to be very much news coming today, at least not planned news to help the market decide.

When that’s the case it can be a situation of “follow the leader” as yesterday’s turnaround may have been and fear and greed become more important than facts and fundamentals.

With some more earnings coming this week, there’s some hope that the news from Home Depot and Wal-Mart will be more reflective of what’s going on than has been the case with Macy’s and Nordstroms, although you do have to wonder what the meaning may be if the lower end of retail is picking up and the middle and higher ends are struggling.

Generally, in the past, increases in employment statistics and wages have seen relative decreases at Wal-Mart and the dollar stores and more shopping at the aspirational kind of stores, like Target and Kohls.

But maybe in a really protracted period of poor job numbers, Wal-Mart may be aspirational for those that haven’t had employment for far too long of a time.

That both Home Depot and Lowes reported good earnings is at least a positive bit of news, but there still has to be validation from others that there is truly something at hand pointing toward an expansion of the economy at the level of housing.

For the rest of the week, I don’t think I’ll be spending any more money.

I’m hopeful that the final days of the week will see some support for those positions expiring on Friday.

My preference would be to see assignments, but as always, I wouldn’t turn my back on any rollovers.

Daily Market Update – November 17,  2015  (Close)

Yesterday was a surprise, but for a change it was the good kind.

It’s really hard to understand much when it comes to these recent moves. You’re not even seeing people who ordinarily are very quick to come up with reasons for whatever it is that’s happening coming forward with explanations.

Normally, they’re more than happy to do so, right or wrong, because it brings greater TV exposure and that’s pretty priceless when you’re in the business of gaining customers (or subscribers).

Yesterday, there was a pretty clear association between the price of oil and the market.

What this past year has been, when it comes to that association is an anomaly.

We were always used to seeing markets move in the direction opposite to that of oil’s movement, even when energy made up a larger portion of the S&P 500 and the DJIA.

Now, good news for energy companies is taken as good news for the market.

Continuing on yesterday’s closing theme; “Go Figure.”

What was a little interesting this morning was that the pre-opening futures were very strong, but weakened after DJIA components Wal-Mart and Home Depot reported earnings.

The unusual part is that both reported better than expected earnings numbers, you know, the kind that can easily be manipulated and their shares went considerably higher in the pre-opening session. So that could only mean that the broader markets were deteriorating more than those 2 were adding to that early rally.

No matter, the futures haven’t been reflective of very much lately, anyway.

Today the futures could have gone wither way and depending on your perspective they could have been wrong or right, as the day finished flat after having gone up really nicely until about 2:16, when the DJIA may have hit against one of those pesky points at 17600, although that didn’t really represent much in the way of resistance.

The same was true for the S&P 500.

With a single purchase yesterday, that may have been luckily timed to have occurred at that point that the market hadn’t yet decided to move higher, I remain cautious on the week and am not necessarily going to go with very much confidence into my cash reserve.

What I would like is to simply see some positive action with those positions set to expire this week as the monthly contracts expire.

My initial thoughts were that this week would be one of looking for more dividend yielders and selecting extended option expiration dates.

Yesterday’s purchase was anything but.

However, it represented what i actually enjoy doing the most, when it comes to stocks.

That is to buy the same stock over and over again, as often as possible, week after week or expiration after expiration.

Morgan Stanley is the latest to fill that bill, but up until recently, there haven’t been many of those the past 2 years.

What sometimes occurs, especially as volatility climbs, is that there may also be advantage to not taking assignment on positions, but instead rolling them over, especially if there’s also a dividend to be captured.

That’s more the case when you have adequate cash reserves, but it’s also a way to alter a portfolio a bit more to a buy and hold mentality and not have to continually hunt for n
ew positions.

This most recent market, and by that, I mean all of 2015, has been one where down beaten stocks, or those that seemed like bargains, took or have taken so very long to rebound.

With that in mind, it’s nice if you can simply do the same stocks over and over again.

To do so, it would be nice to also see another volatility spike, but then to simply see an increased volatility level maintained in a tight, but higher range.

That used to be fairly common and reasonable to expect.

Lately, not so much, but you don’t stop hoping.

Daily Market Update – November 17,  2015  (8:30 AM)

Yesterday was a surprise, but for a change it was the good kind.

It’s really hard to understand much when it comes to these recent moves. You’re not even seeing people who ordinarily are very quick to come up with reasons for whatever it is that’s happening coming forward with explanations.

Normally, they’re more than happy to do so, right or wrong, because it brings greater TV exposure and that’s pretty priceless when you’re in the business of gaining customers (or subscribers).

Yesterday, there was a pretty clear association between the price of oil and the market.

What this past year has been, when it comes to that association is an anomaly.

We were always used to seeing markets move in the direction opposite to that of oil’s movement, even when energy made up a larger portion of the S&P 500 and the DJIA.

Now, good news for energy companies is taken as good news for the market.

Continuing on yesterday’s closing theme; “Go Figure.”

What was a little interesting this morning was that the pre-opening futures were very strong, but weakened after DJIA components Wal-Mart and Home Depot reported earnings.

The unusual part is that both reported better than expected earnings numbers, you know, the kind that can easily be manipulated and their shares went considerably higher in the pre-opening session. So that could only mean that the broader markets were deteriorating more than those 2 were adding to that early rally.

No matter, the futures haven’t been reflective of very much lately, anyway.

With a single purchase yesterday, that may have been luckily timed to have occurred at that point that the market hadn’t yet decided to move higher, I remain cautious on the week and am not necessarily going to go with very much confidence into my cash reserve.

What I would like is to simply see some positive action with those positions set to expire this week as the monthly contracts expire.

My initial thoughts were that this week would be one of looking for more dividend yielders and selecting extended option expiration dates.

Yesterday’s purchase was anything but.

However, it represented what i actually enjoy doing the most, when it comes to stocks.

That is to buy the same stock over and over again, as often as possible, week after week or expiration after expiration.

Morgan Stanley is the latest to fill that bill, but up until recently, there haven’t been many of those the past 2 years.

What sometimes occurs, especially as volatility climbs, is that there may also be advantage to not taking assignment on positions, but instead rolling them over, especially if there’s also a dividend to be captured.

That’s more the case when you have adequate cash reserves, but it’s also a way to alter a portfolio a bit more to a buy and hold mentality and not have to continually hunt for new positions.

This most recent market, and by that, I mean all of 2015, has been one where down beaten stocks, or those that seemed like bargains, took or have taken so very long to rebound.

With that in mind, it’s nice if you can simply do the same stocks over and over again.

To do so, it would be nice to also see another volatility spike, but then to simply see an increased volatility level maintained in a tight, but higher range.

That used to be fairly common and reasonable to expect.

Lately, not so much, but you don’t stop hoping.