Daily Market Update

THE NON-SUBSCRIBER VERSION OF “OPTION TO PROFIT” IS NOT UPDATED ON A REGULAR BASIS, CONTAINS ONLY SELECTED AND DATED ARTICLES AND IS PROVIDED FOR ILLUSTRATIVE PURPOSES, ONLY. LINKS AND OTHER FUNCTIONALITY IS LIMITED.

 

Daily Market Update – May 29, 2014 (8:30 AM)

Hard to believe that the morning isn’t faced with the challenge of having to add to another previous day’s closing high.

With volatility so low and now even precious metals testing some resistance levels the thought that comes to mind is the inescapable reality that cycles rule everything in economics. It’s just the onset, length and magnitude of those cycles that are hard to divine.

With some occasional brief and shallow interruptions this has been a 5 year cycle that appears to have a slowing acceleration as it continues to move higher.

At the same time all of the fears surrounding the impact of the 10 Year Treasury rates on equities have been unfounded as even the direction of rates has been missed. First the fears focused on the rate approaching 3%, barely a couple of months ago and now the fears have followed the rate from 2.75% to 2.5% and still, nothing. The market just goes higher despite the well reasoned theories on why it should not do so.

For the rest of the week there is plenty of economic news scheduled to be released but none of it likely to move the needle very much as we’re on target to have a second consecutive week of gains.

The big difference between setting record after record today versus 5 years ago or in the 1980s is that there isn’t the same kind of complacency. Back then there was often a belief that regardless of the investment it was bound to go higher, if only because it would be carried along with the rest of the market.

By and large that was true for certain times over the past 25 years and the complacency was justified until it wasn’t.

Sometimes the loss of justification came suddenly and caught most everyone by surprise, while at other times that lack of justification came with fair warning that was frequently ignored.

This time around the complacency isn’t there because the market has been very selective. Even while it moves higher and higher not all are taken for the ride and there appears to be much more sector rotation than ever, perhaps accounting for a divergence between the new market highs and the number of stocks in the new daily highs list.

Common sense would tell you that if the market, which is nothing more than the sum of its component parts keeps going higher its component parts must, as well. The fact that the number of stocks on new highs list is decreasing is telling of  the fleeting strength of individual positions, which may in part explain why the vast majority of hedge funds are trailing the market index.

I suppose that those may be concerns for next week.

For this week there aren’t too many positions set to expire, but I’m hoping that there is again a nice mix of assignments and rollovers, much as was the case last week.

The early market indication is for a flat open and even if that is sustained through tomorrow’s close that would be just fine and create the right frame of mind to deal with all of those future concerns.

 

 

 

 

 

 

 

Dashboard – May 26 – 30, 2014

 THE NON-SUBSCRIBER VERSION OF “OPTION TO PROFIT” IS NOT UPDATED ON A REGULAR BASIS AND IS PROVIDED FOR ILLUSTRATIVE PURPOSES, ONLY. LINKS AND OTHER FUNCTIONALITY IS LIMITED.

 

 

Selections

MONDAY:   Happy Memorial Day

TUESDAY:     At another new high and the market looks like it wants to add some more. That would be nice for as long as it can last.

WEDNESDAY:  With another new high to start the day or no real news left for the rest of the week it can really be anyone’s guess what the market does in a vacuum. Any of those guesses can be equally valid

THURSDAY:    A quiet day on the news front and the morning set to begin in an unusual place by not having to follow up to another new record close.

FRIDAY:  A quiet close would be fitting for a quiet week that was just your typical new record close day in and out kind of week.

 

 

                                                                                                                                           

Today's TradesCash-o-Meter

 

 

 

 “SNEAK PEEK AT NEXT WEEK” APPEARS ON FRIDAYS

Sneak PeekPie Chart Distribution

Weekly Summary

  

Daily Market Update – May 20, 2014 (Close)

THE NON-SUBSCRIBER VERSION OF “OPTION TO PROFIT” IS NOT UPDATED ON A REGULAR BASIS AND IS PROVIDED FOR ILLUSTRATIVE PURPOSES, ONLY. LINKS AND OTHER FUNCTIONALITY IS LIMITED. 

 

Daily Market Update – May 20, 2014 (Close)

With an occasional exception over the past 3 months Tuesdays have been a day for markets to move higher.

Eddy Elfenbein, of Crossing Wall Street, keeps track of statistical oddities and in the past has shown that there actually is a predilection by day of the week, for positive market performance, that transcends a mere three month period of observation.

Tuesdays have a reasonably long history of good performance, although you would be hard pressed to call it anything other than an anomaly. There isn’t much reason to suspect that a single day of the week would repeatedly be better than any other day of the week.

I haven’t figured out f there’s any way to take advantage of that, as the statistics don’t look at what kind of machinations may take place during each of those days and only looks at the end result, but today is one of those days that I’d like to see the pattern continue.

While yesterday saw a handful of new covered positions get sold there are far too many more sitting and not generating income. A few nice days higher could help remedy that, but the pre-open futures trading is giving no indication of a market set to move higher.

But today wasn’t one of those nice Tuesdays.

Instead, while the flow of earnings reports is now slowed, there are still more reports to come for another month and the ones coming through this morning are doing nothing to move the market higher.

While Dicks Sporting Goods, Staples and Home Depot are all retailers, they represent very different segments of retail and none of them have much good news to share this morning. While Home Depot isn’t getting sold off too heavily in the pre-open and eventually was one of the few gaining positions during the regular trading session. the others are looking at large losses and if the recent pattern holds their share price recovery will be slower than is usually the case.

With a broad range of retailers consistently presenting disappointing earnings or seeing profits rise, but in the face of falling revenues, you do have to wonder where the economic growth is hiding. It can’t all be concentrating itself in Nordstroms. Yet this disconnect between the reality and the perception is rarely mentioned, much less discussed.

Today, however, that changed and it was a prominent topic of discussion all through the day. Somehow, it had gone unnoticed up until this point, as so many have been left deluded by the impact of share buybacks and simply accepted the unequal comparisons of one quarter to the next, with EPS being reported on fewer and fewer shares in the public float.

After yesterday’s late day push higher the market was within about 0.3% of another new S&P 500 record before the morning’s trading began, as it pays no attention to the economy. While it’s often said that the market discounts the future if you look back 6 months, when the S&P 500 stood at 1800 I suppose you can make a case for today’s 1885 level, but if you go out a year in time it gets much harder to justify a 15% advance.

However, most would agree that the economy isn’t exactly humming along at the moment and that there’s still plenty of room for further economic growth ahead. Maybe that’s the fuel that has been advancing the market and will continue doing so. 

The anticipation of further growth to get us back to historical standards may be the driving factor, because we’re certainly not at a stage when the economy is red hot and the markets can be expected to start slowing down as less acceleration of growth becomes more likely.

But what does any of that mean for today or this week?

Not too much.

The plan remains the same. Not too many new positions, maybe a purchase here or there and just the hope that some of these good for nothing positions can begin to support themselves, even if it’s only something symbolic, as from an occasional DOH trade or two.

At least there’s always hope.

 

 

 

 

 

 

 

 

Dashboard – February 17 – 21, 2014

 THIS IS NOT UPDATED ON A REGULAR BASIS ON THE NON-SUBSCRIBER SITE

MONDAY:   President’s Day Holiday. The rest of the world is behaving so hopefully no firewroks to beig the week tomorrow.

TUESDAY:     Short week with what will likely be a non-newsmaking FOMC report released tomorrow, as we’re now less than 1% away from another S&P 500 high

.WEDNESDAY:  FOMC minutes released this afternoon, but no one really cares, despite this being the first meeting presided over by new Chairman Yellen. Still, reaction can be in the making, even if no surprises.

THURSDAY:    If Wal-Mart can’t make a go of things what chance does anyone else have?

FRIDAY:  A busier week than expected with no surprises appearing on the horizon to close out the monthly cycle.                                                                                                                                                

” *SNEAK PEEK AT NEXT WEEK” APPEARS ON FRIDAYS

Sneak Peek

  

SELECTED ARTICLES APPEARING IN OPTION TO PROFIT, SEEKING ALPHA OR THESTREET.COM ARE INCLUDED IN THE NON-SUBSCRIBER SITE FOR ILLUSTRATIVE PURPOSES. THESE ARE NOT UPDATED ON A REGULAR BASIS