Concerns are building over the banks. The world banking system is in bad shape! For sure investors are getting spooked because of the 2008 banking collapse. The banks do have problems but the general consensus is this is not a return to a credit crisis. But I say, if the interest rates go down again, you never know. There are so many real problems and many problems fabricated. I feel this market has no chance of going up for a little while. At least that’s the way I’ll be trading, or not be trading! Yellen testifies tomorrow. This should be interesting! The way the market has been moving I think we’ll see a different demeanor on the body language of the Fed Chair. As if the oil problem wasn’t enough, now she has the banks stocks prices falling with balance sheet concerns. There is a lot of fear, fear of the unknown. In turn, Wall Street is making problems out of situations that shouldn’t be a concern. Last week we had 4.5% unemployment. The lowest it’s been in years but the market went down. There were concerns on Wall Street that too many people were working and it would hurt individual salaries. You can’t make this shit up! Be very careful! There are many real problems moving the market and there are some BS problems causing panic. I haven’t been trading and I probably won’t be doing much until the spook is gone. If you are only approved to do Covered Calls, be very careful. You don’t want to get stuck in a falling stock for a premium. I would not recommend getting into any new positions to sell Calls. If you already own stock and you have no plans to sell, it could be a good time to sell Calls on those stocks. Other than that, I would lay low until things settle down and the market hits a bottom. There will be plenty of opportunities in the near future.
Tomorrow congress will be grilling Janet Yellen. Let’s see if she makes comments to build fear of a recession or if she eases the the fear. It will be very interesting how her comments move the market. Get ready for another wild day in the market!
Steve
The Options Coach