Daily Market Update – May 13, 2014 (9:30 AM)
While yesterday was one of those rare Mondays that was almost devoid of trading, it was a nice day to sit back and watch the market do some heavy lifting.
It still seems a little incongruous that both the DJIA and S&P 500 set even more new highs yesterday when there’s really very little to support that kind of enthusiasm, especially when it’s also apparent that there’s so much nervousness around.
That’s an odd combination and I can’t really call a similar period over the past 30 years.
Every bull market and every climb higher has its naysayers and doubters, but you don’t often see so many doubters and so many actions that seem counter to the moves higher, such as the real pronounced NASDAQ weakness.
Generally, weakness in that sector is an early signal of an upcoming market top and not a signal to keep climbing higher and higher.
Today is looking to get off to a slow start, but at least there’s the possibility of some continued follow through to yesterday’s strength, which was long overdue, despite reaching all of those new highs.
I may remain content to add little in the way of new positions this week if that kind of strength can continue as we enter into the final meaningful week of this earnings season. So far, there has been very little to get excited about. Even though some big retailer names report this week, the overall retail numbers are down and that can’t be a good thing, unless all of retail is now being concentrated in the likes of Wal-Mart, Macys and Nordstroms.
It’s also not as if Keuring Green Mountain Coffee Roasters, which continues to rise after its earnings report is reflective of our economy. It’s just reflective of questionable taste in coffee.
With the May 2014 ending this week I would love to see a fair number of assignments as I’d like to add to my cash reserves. Making new highs may be the starting point for going even higher, but it may also be an inflection point and be the start of a reversal.
Either way, it’s good to be prepared and cash is the best way to be able to play either of those scenarios.
In the meantime, yesterday was a little disappointing, despite the nice addition to the bottom line, because of the inability to put through some new cover on existing positions. Hopefully that will be a little different today as I’d like to get some more positions set up for weekly expiration as part of the June 2014 cycle.
In the event of any weakness today I may get enticed and pick up some items that are on the weekly list, as well as looking at other opportunities, but still expect that it will be a fairly quiet day and that I’ll be holding onto cash reserves for the most part.
Otherwise, sit back and hopefully enjoy as some more heavy lifting would be a nice thing to watch while sipping on some good coffee.