TheAcsMan.com no longer publishes original content material. Reprints of previously published "Daily Market Updates" available to subscribers of OptionToProfit.com appear for informational purposes only and links are de-activated.
(see all trades this option cycle)
Daily Market Update - May 20, 2013 (Close)
It's rare that on a Monday morning marking the start of a new monthly option cycle that the first hour of trading goes by and I've done nothing, especially with cash coming out of every pore.
It's also rare to have absolutely nothing to identify as a possible market mover. It is eerily quiet and the market is trading as if no one came in to work the algorithms today. The energy level is seriously low, not something you would expect when the market is hitting new highs day after day.
Where is the euphoria? Maybe that's a contra-indicator? With most talking heads still calling for continued market strength and revising their S&P forecasts, it seems more like a case of not wanting to be the last remaining pessimist on record.
The way things are going, that just might be me.
When the only news is discussion of Yahoo's purchase of Tumblr and that discussion is still left over from Friday, you know that the bottom of the barrel is being scraped.
As it turns out, the young CEO of Tumblr dropped out in ninth grade from the same high school that I attended. I suppose I should have done the same thing, but I enjoyed Number Theory class way too much. I probably also should have kept closer ties to the classmate that would go on to become Goldman Sachs' CFO, until his retirement a few months ago.
While the precious metals market had a lot of excitement today as it flipped another seemingly large daily loss into a large daily gain, our stock market just sort of muddled along with everyone being reminded that tomorrow could be the 19th consecutive Tuesday that the market posts a gain
There's just something inherently wrong with a statistic like that, but I have to admit that I was hoping today would be a down day just so that I could buy lots of shares and wait until tomorrow to sell the calls.
That strategy probably has as much merit as "Sell in May and then go away," although the reversal in the metals complex shows that anything is possible and the possible can happen in a flash.
Well, after the excitement of learning about my high school years, at least we have Wednesday's Federal Reserve minutes to possibly move things around as even more focus than ever before is being placed on each and every word uttered by Chairman Bernanke, looking for any clue as to when the Federal Reserve's infusion of cash may start to taper down.
With so much fear and concern revolving around the withdrawal of support for the markets, I don't know why anyone would be suprised to actually see a relief rally once the actual news finally hits. That sort of thing would be reminiscent of interest rate hikes in the Greenspan days. Everyone was so stressed about the announcements that once they happened it was party time, even though the news wasn't positive for the economy.
One market that I never look at is interesting, however. That's the Lumber market, as its futures are basically behaving just as Gold has done lately, going significantly lower. I don't know how much Lumber is a proxy for economic growth, particularly housing, butthere must be some kind of a essage coming from such weakness.
The way the investing mindset works any evidence of a sluggish economy could be construed as being good for the stock market because it might mean continued Federal Reserve intervention. But then, of course, it could equally be construed as negative, because the economy continues to need that level of intervention.
I don't really care. I just want to buy and sell stocks. That is my economy, both on the micro and macro levels.
Even with the market at these levels and even though I continue to expect some kind of meaningful correction sooner rather than later, I'm still willing to put some of that cash to work Although "buying high" is never a good strategy, it's usually not a death blow as long as some patience is exercised.
OK, maybe sometimes a lot of patience.
I'm currently at about 60% cash after a slew of month ending assignments. My original goal was to transition to a 40% cash level, so I'm willing to pick up new positions that might bring me toward that 40% level. But it's still so difficult to buy just for the sake of buying.
Under ordinary circumstances markets tend to sycle in and out of sectors in favor. During those times you could select representative stocks from the various sectors and look at their charts and see marked differences.
By and large, that's not very true right now. Most everything looks the same.
The trickle down to that observation is that during ordinary times you might consider putting new money or recycled money into under-performing sectors or stocks in the reasonably assured feeling that they would rotate into favor.
By and large, that hasn't been true lately, either.
But it will be. One of these days, it's just a question of when and for how long you can resist fighting the trend while letting history be your guide.
Coming into the 11 o'clock hour I was still having a hard time resisting, but having methodically come so far, it's hard to turn around.
Maybe I'll write about that on Tumblr. That should drag down the value of the deal.
OTP Sector Distribution* as of May 20, 2013
* Assumes equal number of shares in positions
Intraday versions of the Daily Market Update are not archived. You may access prior day's Daily Market Updates by clicking here
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
The posting of these trades is not a recommendation to initiate positions nor to execute any trading positions, as they may represent time sensitive actions.
Subscribers may see ROI statistics on all new, exisiting and closed positions on a daily updated basis.