Daily Market Update – April 27, 2015 (Close)
Compared to last week, anything would qualify as being a busy week, but this coming week will meet the definition at any time.
In addition to being the second of the two busiest earnings weeks each quarter, getting started with Apple after today’s closing bell, there’s lots more on tap.
Before Wednesday afternoon’s FOMC Statement is released, there will also be a GDP Report.
That tandem may be a powerful combination.
With the FOMC meeting crafting its statement lasting for 1 1/2 days, that GDP release may change the verbiage used in the final statement release.
The question needing to be answered from the GDP Report is whether or not the anticipated consumer led expansion from decreasing energy prices is ever going to happen.
The expectation is that it may, but not yet.
Sooner or later weather can’t keep being an excuse.
After the GDP is release we get to scour the FOMC Statement and try to figure out whether interest rate increases will happen sooner or maybe wait until the next winter, when it would serve as the perfect anti-complement to weather induced slow-downs.
As busy as the week may be, with the exception of the Apple report today, there wasn’t not too much going on to move markets.
The early futures trading were looking to add to Friday’s closing highs in the S&P 500 and the NASDAQ, but the day ended up being very listless.
In fact, it was interesting that early on, while the market was higher, the Volatility Index was actually also higher, whereas it would have been expected to have gone lower.
However, if you looked at the minute charts for the S&P 500 you would have seen that there were lots of ups and downs during that time period of the first 2 hours, that despite being in a narrow range,, really did satisfy the mathematical definition of volatility, despite our not perceiving it as such.
With a little more cash in hand and a handful of positions expiring this week that are at least in striking range of their strikes, I’m again hopeful for a week that will have a decent combination of new call options sold, rollovers and assignments.
With that cash, I’m a little less reluctant to add new positions, but will likely look for weekly option expirations and try to balance the number of new positions with the number of assignments that I think me be likely.
The turned out to bbe the case today to start the week, with 2 new positions initiated, one rollover and even a call sale on a long uncovered position, Coach, which happens to report earnings tomorrow.
With the FOMC and GDP having the ability to significantly alter the path of the market, I definitely do not want to get too far out ahead of it and may also consider adding new positions after the FOMC Statement release, but then looking at the following week’s expiration.
As the morning got ready to begin, I was, as expected, an observer and wasn’t too eager to jump aboard if the climb happened to go much higher from where the futures were indicating. With a little decline from the early modest climb up, it looked like a good time to get involved and wait for the ride that may be coming later in the week.
In the meantime, as the march does continue higher and with concerns that it brings added downside risk, there may also be reason to again focus on the added value and safety that dividends may provide in the near term. Hopefully, today’s purchase of Kinder Morgan, which is ex-dividend tomorrow is a step in the right direction.