Daily Market Update – Page 2

January 23, 2017

Hoping to Keep a Strategy Alive and Imbued with Belief

There are so many sayings and expressions around the concept of hope.

The most recent, and the one that was identified with a successful Presidential campaign, was “Hope you can believe in.”

“Keep hope alive,” was a rallying point of Jesse Jackson and chanted at some many venues.

“Hope is not a strategy,” is something that’s frequently said when it comes to investments.

For me, I was just hoping to get more trades done today.

I did keep the streak for 2017 alive by making a trade today, but there were so many that I wanted to see made today.

Why that matters is that my 2017 strategy has, thus far, been more of a “hit and run” one.

I want to sell as many calls as I can, especially on non-performing holdings, at whatever strike I can in order to generate some meaningful income revenue.

This week, following the end of the January 2017 option cycle, I have lots of those non-performing positions. Continue reading “Hoping to Keep a Strategy Alive and Imbued with Belief”

Visits: 14

January 21, 2017

What a Great Week

TheAcsMan, Eddy Elfenbein What a great week.

As my wife likes to continually remind me, “it’s not always about you,” but then again, I don’t really see her TheAcsWoman site anywhere, now do I?

But this was a great week, even as it isn’t always about the stock market.

The stock market basically did nothing on the week, but who cares?

Ordinarily, my answer to that rhetorical question would be “I do,” but this week was different.

It was different because, despite political differences and still some astonishment as I watched the Inauguration, still wondering how both political parties could have failed so badly as to get us to this point, it became clear that what hasn’t failed is our nation’s ability to move forward.

That explains why I attended one of the Inaugural Balls last night, although I did try to keep a low profile, due to my well-known political ties on the other side of the aisle.

I made the mistake, though, of being in the same place and the same time as the famed Eddy Elfenbein, of Crossing Wall Street and, so, it was hard to escape the cameras.

But the point is that the process is one that reflects greatness, as does peaceful protest.

So I’m excited about what next week brings, which now brings me back to the stock market and how the stock market affects me, because it is all about me. Continue reading “What a Great Week”

Visits: 18

January 11, 2017

Small Victories

smallvictories It may be too soon to call this a victory, but for the moment, I’ll take whatever I can.

In this case, the victory was waking up this morning an still having Monday’s share purchase of Whole Foods in the account.

Whole Foods was ex-dividend today for $0.14

But shares closed yesterday at $30.73, which meant that the $30.50 strikes could have been assigned early.

But it’s all about the math and the probability of what could still happen over the course of the days remaining on the option contract.

In this case, following the $30.73 close and then deducting that $0.14 dividend, Whole Food shares would then start being available to trade at $30.59

For the option holder, the question was would it be worth actually paying the $30.50 for shares in order to grab the $0.14 dividend or hoping that maybe there was still some juice in that option contract.

Of course, if the option holder decided to grab the dividend, not only would he have to pay the $30.50 for shares, but he would also take the risk of shares declining in value at the open. Continue reading “Small Victories”

Visits: 11

January 5, 2017

Will Common Sense Make a Comeback?

I didn’t vote for Donald Trump, but I really can’t wait until he steps into the Oval Office.

It’s not that I suddenly find myself agreeing with whatever Donald Trump believes, although it is hard to tell what he really believes, it’s just that I think that he will bring out the best in people.

He will do that at the same time that he has shown that he can bring out the worst in people.

You can’t disagree with Hillary Clinton’s reference to “deplorables,” although you would really have to question both her estimate of how many of Trump’s supporters really did fit into that category, as well as simply questioning her judgment in making the comment, itself.

By the same token, there are clearly “deplorables” on the other side of the political spectrum and in that group I might include those who have a hard time accepting the fact that Donald Trump will be our next President.

My father used to always say that “money brings out the best in people and the worst in people.”

For years, I thought that his lack of command of English as a language caused him to use the conjunction “and” when he really meant “or.”

It was only a few years ago that I realized that he said exactly what he meant.

Money can bring out both the best and the worst in someone and I think that Donald Trump will do the same with our elected officials.

Some, unfortunately, will feel even more emboldened to act in a ridiculous manner, while others are going to realize that the only way to move the nation forward is to come to some reconciliation across the aisle.

Remember when there were actually moderates in both parties who could stand one another professionally and personally?

Donald Trump may be the enzyme that brings them back together again.

Continue reading “Will Common Sense Make a Comeback?”

Visits: 5

January 31, 2014

Week in Review (January 27 – 31, 2014)

Option to Profit Week in ReviewJanuary 27 – 31, 2014

NEW POSITIONS/STO	NEW STO	ROLLOVERS	CALLS ASSIGNED/PUTS EXPIRED	CALLS EXPIRED/PUTS ASSIGNED	CLOSED
5 / 5	1	3	4 / 0	4 / 0	0

Weekly Up to Date Performance

January 27 – 31, 2014

New purchases beat the time adjusted S&P 500 this week by 1.6% and also surpassed the unadjusted index by 1.8% during a week that saw the end to the worst performing month since 2010.

The market showed a small adjusted loss for the week of 0.2% and unadjusted loss of 0.4% for the week, while new positions gained 1.3%.

For the 25 positions positions closed in 2014, performance exceeded that of the S&P 500 by an unexpectedly large 1.5%. They were up 3.5% out-performing the market by 81%. While my expectation is for the difference to be greater than 1% in a flat or down market, I don’t expect it to continue at that great of a difference as the year continues.

If you’re looking for a positive spin it’s hard to find one as the market ended a bleak January 2014.

Okay, but there were a few positives despite the lack of a January Rally.

On a positive note, despite a third successive down Friday the market made a great recovery, as it was looking as if it would be another 200 point range loss. Unfortunately, that recovery gave way in the final 30 minutes, but I wouldn’t get overly concerned about that, as there’s little value for big players to stay long over the weekend when there is international risk.

On another positive note some may have noticed that of the three rollovers this week two actually rolled up to higher strikes as suddenly the premiums are beginning to show some life as volatility perked up.

But that’s enough spinning.

This was another of those weeks that creates nervousness. You can’t rely on good earnings from Netflix and Facebook to carry an industrial economy forward.

Next week’s Employment Situation Report will be more important than usual, coming off of last month’s abysmal report.

As earnings season starts to wind down, with most of the important barometers now having reported, we may simply fall prey more to economic reports and the developing issues in the rest of the world.

While it remains counter-intuitive more of this churning back and forth, especially as it develops nervousness, is really a good thing for those selling options. The most humane way to arrive at a good place as far as getting those fatter premiums would be a slow and methodical decline. That would make it much easier to rollover positions and would likely require fewer new purchases, as assignments would be less frequent.

Having been in bear markets and corrections before, that’s really a good place to be.

The problem though, is that declines are rarely methodical. They tend to be swift and they tend to have given plenty of clues, yet everyone acts surprised when it does finally occur.

Human nature makes it difficult to learn, because, at heart, we’re all optimists.

What’s nice about a market decline if you have some degree of hedging going on is that you can still be an optimist or at least not feel the pressure as much as the next guy.

I don’t think that next week will necessarily be a continuation of the past week or January, for that matter.

While I really dislike adding to the list of uncovered positions I think that a number are well positioned to gain back some ground in order to restore their cover. That may also be made a little easier if volatility continues to increase, as the premiums will improve and make it more likely to be worthwhile to make some of the hedging trades.

While I would have liked even more assignments this week, it was an improvement over the situation the previous two weeks and opens up the possibility of staying in the game.

Next week is another earnings busy week and I’ll have another separate article focused on some of the potential earnings plays.

I’ve been somewhat reluctant to recommend some of those earnings related trades, as they usually are done through the sale of puts. The concept of puts isn’t always intuitively grasped by all and sometimes requires greater oversight. However, I’ve been making those trades for my own account and have been, for the most part, pleased.

Sometimes frustrated, but overall, pleased.

For those that haven’t considered those trades as part of their arsenal, consider reading this article on the role of puts in a conservative investing strategy I’ve evloved quite a bit over the years regarding the role of puts and am glad that has been the case.

For those that communicate with me you know that I always welcome the communication. For those that don’t if you have any questions or want some clarification, fire away. Some of the best opportunities may come with otherwise risky trades that have their risk understood and attenuated.

Understanding the various tools, as well as considering a different mindset as spelled out in the “D’oh Strategy” are especially useful at a time when the market may finally be ready for a little bit of a break.

This week’s details may be seen in the Weekly Performance spreadsheet * or in the PDF file, as well as as in the summary.below

(Note: Duplicate mention of positions reflects different priced lots):

New Positions Opened: BMY, CHK, FAST, IP, TXN

Puts Closed in order to take profits: none

Calls Rolled over, taking profits, into the next weekly cycle: ANF, TXN

Calls Rolled over, taking profits, into extended weekly cycle: none

CallsRolled over, taking profits, into the monthly cycle: MSFT

Calls Rolled Over, taking profits, into a future monthly cycle: none

Calls Rolled Up, taking net profits into same cycle: none

New STO: HFC

Put contracts sold and still open: none

Put contracts expired: none

Put contract rolled over: none

Long term call contracts sold: none

Calls Assigned: BMY, EBAY, IP, VZ

Calls Expired: C, HAL, INTC, LOW

Puts Assigned: none

Stock positions Closed to take profits: none

Stock positions Closed to take losses: none

Calls Closed to Take Profits: none

Ex-dividend Positions: FAST (1/29 $0.25), TXN* (1/29 $0.30), C (1/30 $0.01)

some reported early assignment of TXN shares

For the coming week the existing positions have lots that still require the sale of contracts: AGQ, APC, C, CLF, DRI, FCX, GPS, HAL, INTC, LB, JCP, LOW, LULU, MCP, MOS, MRO, NEM, PBR, PM, RIG, TGT, WAG, WFM, WLT (See “Weekly Performance” spreadsheet or PDF file)

* If you don’t have a program to read or modify spreadsheets, you can download the OpenOffice Suite at no cost.

Visits: 15

January 31, 2014

Daily Market Update – January 31, 2014 (Close)

(see all trades this option cycle) Daily Market Update – January 31, 2014 (Close) The Week in Review is now posted and the Weekend Update will be posted by 12 Noon on Sunday. Access prior Daily Market Updates by clicking here *OTP Sector Distribution as of January 31, 2014** * Assumes equal number of shares in positions Posting of trades is not a recommendation to execute trades
Monday through Thursday? See “Daily Market Update” with first edition published by 12 Noon and Closing Update published by 4:30 PM Friday? See Week in Review for summary statistics and performance Sunday? See Weekend Update for potential stock choices for coming week Any day? See Performance for open and closed positions Subscribers may see ROI statistics on all new, existing and closed positions on a daily updated basis
See all Trade Alerts for this monthly option cycle

Visits: 9

January 31, 2014

Daily Market Update – January 31, 2014

(see all trades this option cycle) Daily Market Update – January 31, 2014 (9:00 AM) The Week in Review will be posted by 6 PM and the Weekend Update will be posted by 12 Noon on Sunday. Today looks to be a tumultuous day. Possible trades include: Assignments: BMY, EBAY, IP, TXN, VZ Rollovers: ANF, INTC, MSFT Expirations: C, HAL, LOW Trades, if any, will be attempted to be made prior to 3:30 PM (EST) *OTP Sector Distribution as of January 30, 2014** * Assumes equal number of shares in positions Posting of trades is not a recommendation to execute trades
Monday through Thursday? See “Daily Market Update” with first edition published by 12 Noon and Closing Update published by 4:30 PM Friday? See Week in Review for summary statistics and performance Sunday? See Weekend Update for potential stock choices for coming week Any day? See Performance for open and closed positions Subscribers may see ROI statistics on all new, existing and closed positions on a daily updated basis

Visits: 9

January 30, 2014

Daily Market Update – January 30, 2014 (Close)

(see all trades this option cycle) Daily Market Update – January 30, 2014 (Close) One nice thing about the market is that it doesn’t always hold a grudge. It can lose 200 points one day and give indications of having totally forgotten about that blow out the very next morning. For investors that often leads to confusion because human nature prefers to see continuity and slow transition. The market, on the other hand, although it is very much a product of human behavior, doesn’t always respond in the way that we are able to grasp. Sometimes life would be much easier if we were all able to just move forward and not be weighed down by the past and our own prejudices. On the other hand, while we may occasionally take steps backward, for the most part we are forward moving beings. The market is anything but, although the past year it has behaved in a human fashion, by only taking small steps backwards and otherwise forging ahead. Lately, however, the market has been acting like a human in the midst of a tail spin with predominant steps backwards and only an occasional gasp of life. Was today’s 50% recovery of yesterday’s 200 point decline a gasp or a return to life? That split in behavior, going from a forward charging entity to one that is tentative at best and manifests great nervousness with news doesn’t generate very much short term confidence. Wouldn’t you rather know whether something is in the throes of a death spiral or simply taking a needed rest before continuing with a vibrant life? The underlying components of the stock market, that is the companies that comprise the market are expressing some pessimism regarding their own future prospects for growth. Record level share buy backs are reflective of record levels of cash, but also of an inability to recognize opportunities to use that cash in a constructive fashion. A number of companies, such as Caterpillar and Cisco have been accused of having buyback programs that have been purchasing shares at values much too high,just so the cash wouldn’t be on the books and to use that cash to artificially prop up share price by simple supply and demand laws. Since cash basically has a P/E of just 1, while it may be non-intuitive, may actually serve to keep a lid on share price. The more cash you have relative to your market capitalization the lower your P/E will be. The reason that Cisco and Caterpillar’s actions are important is that in the past share buybacks were viewed as a reflection of the company’s opinion that its shares were bargain priced and was a sign to the rest of the world that investment in those was a good idea. Now you can’t be quite as certain, although the optics of the situation result in better earnings per share and in the short term may move shares higher on that basis, as well as a shrinking supply of shares floating in the face of stable or increasing demand can still send shares higher. As this week is coming to an end and earnings have been somewhat better than the previous week, hopefully we will end on an up note for a change and see some acceptable combination of rollovers and assignments. However, placing lots of trickle down hope on the basis of earnings from Facebook and Netflix and other such companies that really don’t add great economic value across the spectrum is probably not a good idea. While cutting edge is great for growth and creation of new markets, it’s still retail, construction, infrastructure that really moves us forward with confidence. I can’t wait to be able to Tweet out that kind of good news when it actually happens and maybe increase GDP at the same time. Access prior Daily Market Updates by clicking here ~~OTP Sector Distribution* as of January 30, 2014~~ * Assumes equal number of shares in positions Posting of trades is not a recommendation to execute trades
Monday through Thursday? See “Daily Market Update” with first edition published by 12 Noon and Closing Update published by 4:30 PM Friday? See Week in Review for summary statistics and performance Sunday? See Weekend Update for potential stock choices for coming week Any day? See Performance for open and closed positions Subscribers may see ROI statistics on all new, existing and closed positions on a daily updated basis
See all Trade Alerts for this monthly option cycle

Visits: 11

January 30, 2014

Daily Market Update – January 30, 2014

(see all trades this option cycle) Daily Market Update – January 30, 2014 (9:15 AM) One nice thing about the market is that it doesn’t always hold a grudge. It can lose 200 points one day and give indications of having totally forgotten about that blow out the very next morning. For investors that often leads to confusion because human nature prefers to see continuity and slow transition. The market, on the other hand, although it is very much a product of human behavior, doesn’t always respond in the way that we are able to grasp. Sometimes life would be much easier if we were all able to just move forward and not be weighed down by the past and our own prejudices. On the other hand, while we may occasionally take steps backward, for the most part we are forward moving beings. The market is anything but, although the past year it has behaved in a human fashion, by only taking small steps backwards and otherwise forging ahead. Lately, however, the market has been acting like a human in the midst of a tail spin with predominant steps backwards and only an occasional gasp of life. That split in behavior, going from a forward charging entity to one that is tentative at best and manifests great nervousness with news doesn’t generate very much short term confidence. The underlying components of the stock market, that is the companies that comprise the market are expressing some pessimism regarding their own future prospects for growth. Record level share buy backs are reflective of record levels of cash, but also of an inability to recognize opportunities to use that cash in a constructive fashion. A number of companies, such as Caterpillar and Cisco have been accused of having buyback programs that have been purchasing shares at values much too high,just so the cash wouldn’t be on the books and to artificially prop up share price. Since cash basically has a P/E of just 1, while it may be non-intuitive, may actually serve to keep a lid on share price. The more cash you have relative to your market capitalization the lower your P/E will be. The reason that Cisco and Caterpillar’s actions are important is that in the past share buybacks were viewed as a reflection of the company’s opinion that its shares were bargain priced and was a sign to the rest of the world that investment in those was a good idea. Now you can’t be quite as certain, although the optics of the situation results in better earnings per share and in the short term may move shares higher on that basis, as well as a shrinking supply of shares floating in the face of stable or increasing demand can still send shares higher. As this week is coming to an end and earnings have been somewhat better than the previous week, hopefully we will end on an up note for a change and see some acceptable combination of rollovers and assignments. However, placing lots of trickle down hope on the basis of earnings from Facebook and Netflix and other such companies that really don’t add great economic value across the spectrum is probably not a good idea. While cutting edge is great for growth and creation of new markets, it’s still retail, construction, infrastructure that really moves us forward with confidence. I can’t wait to be able to Tweet out that kind of good news when it actually happens. Access prior Daily Market Updates by clicking here *OTP Sector Distribution as of January 29, 2014** * Assumes equal number of shares in positions Posting of trades is not a recommendation to execute trades
Monday through Thursday? See “Daily Market Update” with first edition published by 12 Noon and Closing Update published by 4:30 PM Friday? See Week in Review for summary statistics and performance Sunday? See Weekend Update for potential stock choices for coming week Any day? See Performance for open and closed positions Subscribers may see ROI statistics on all new, existing and closed positions on a daily updated basis
See all Trade Alerts for this monthly option cycle

Visits: 8

January 29, 2014

Daily Market Update – January 29, 2014 Close

(see all trades this option cycle) Daily Market Update – January 29, 2014 (Close) When the S&P 500 Futures opened for trading about an hour after the Turkish Central Bank announced a huge 4.5% increase in its overnight lending rate, it rallied sending the futures up about 9 points. This morning they’re down by almost 10 points. That’s quite a turnaround. I’m not really certain what the reason for that reversal is, but the overnight futures aren’t necessarily a good indicator of where the markets will find themselves trading the next day. I really don’t know why I even bother looking at them or why I sometimes get hopeful or fearful. Today, once again, attention gets turned to the 2 PM release of the FOMC minutes and the key question is whether the taper will continue or be deferred, based on recent employment data and perhaps other factors that may reflect a weaker than expected economy. It’s hard to know what the impact of recent overseas weakness might be on the Federal Reserve. Things used to be very straightforward, but now everything is connected. These days Turkey matters.and you have to wonder whether a 12% overnight rate might pull some money away from the United States and into Turkey or all of the other countries that are bound to raise their rates in response to some rate creep here in the US. I’m glad I don’t have to think about these sort of things. While I don’t expect much of a surprise in today’s FOMC release, it’s always fascinating to see the initial responses and so often the reversals of those responses, as well as the delayed responses. So often it seems that an hour later, or sometimes the next day is when euphoria or fear set in. As with the past two weeks I’m hopeful that the market can hold it together long enough to send some reasonable mixture of rollovers and assignments in order to be able to fully participate in next week’s market. Until then it may be another bumpy ride as the market has been showing continued weakness this morning and likely to erase yesterday’s gains. As it would turn out there was no surprise in the FOMC minutes but the market just added to the already triple digit losses, for no real reason, other than prevailing sentiment. Is this simply a susceptible market or one that is inherently weak? Today I think it’s just a susceptible market. The likelihood of executing any new purchases to day is pretty small, as I am already at my lower limit for cash reserves at 20% and besides, it’s a Wednesday, which are usually slow anyway. For now, I’m content to see how the world deals with a changing interest rate environment and currency fluctuations. Those are two things that I really don’t understand and have always kept my distance from those markets. Whether the current “crisis” is additive, infectious or simply one in passing will be clear in just a few days. This is a good time to be a passive observer. Access prior Daily Market Updates by clicking here *OTP Sector Distribution as of January 29, 2014** * Assumes equal number of shares in positions Posting of trades is not a recommendation to execute trades
Monday through Thursday? See “Daily Market Update” with first edition published by 12 Noon and Closing Update published by 4:30 PM Friday? See Week in Review for summary statistics and performance Sunday? See Weekend Update for potential stock choices for coming week Any day? See Performance for open and closed positions Subscribers may see ROI statistics on all new, existing and closed positions on a daily updated basis
See all Trade Alerts for this monthly option cycle