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.