A relatively quiet options-expiration Friday on Wall Street

A relatively quiet options-expiration Friday on Wall Street

Janet Yellen as Brünnhilde.
Fed Chief Janet Yellen reappeared this week in full Brünnhilde garb to save the bulls. Oil prices, maybe not. (Composite by the author.)

WASHINGTON, December 19, 2014 – Not really much to talk about today in the markets. Oh, sure, after a few predictable ups and downs, the market is back up around 80 Dow points one half hour before Friday’s closing bell. But it’s options and futures expiration day today, and trading is predictably weird at such times no matter what underlying market conditions might be.

So we’ll really have to wait until Monday to see if this week’s sudden and welcome Santa Clause Rally will continue Christmas Week after its late initiation two trading days ago.

Averages were pummeled as investors sold (and massively sold short) any stocks with anything to do with fossil fuels, immediately taking the rest of the market down in the process. But then, all of a sudden, Janet Yellen re-appeared like a Wagnerian figure from Valhalla, said almost the magic soothing words the market wanted, and it was “Katie, bar the door!” Or, in 2014-speak: “Oh, what the hell. Let’s rally anyway.”

And rally the market did, even though not much has really changed in the oil patch or anywhere else. At this point, depending on today’s close, we’ve gained back, by the Maven’s rough estimate, over 2/3 of the market’s recent, almost-correction decline which, for now at least, seems to have bottomed at about a -5%.

Next week, we’ll see if we get follow through, although a slightly negative day might not be a bad thing to make sure trading doesn’t get too excessive on the bull side, either.

Oddly, oil took a big blip up today. Although maybe that ailing commodity’s two-plus point move wasn’t so odd. More likely, given expirations today, it was a matter of taking off short bets and moving on to the next month’s contract in the trading pits or whatever is left of them in this computerized age.

So we’ll watch and wait for Monday, which, if we get some red ink, but not excessive red ink, might be the time to pick up a few bargains.

Today’s trading tips

Well, we’re a little late for any tips to make any difference today, but that’s because we don’t really have any. The Maven is a bit pissed that he didn’t get any of Juno’s (JUNO) IPO shares. But that promising biopharm stock got lots of positive buzz this week and was priced up twice before final pricing at $23 per share. Opening late in the morning, as IPOs usually do, the stock hit escape velocity, peaking quickly at $39.50. It’s since trailed off to about $36 and we’re glad we didn’t chase it out of frustration.

Juno’s pipeline is promising, we’re told, so if we can get some shares even lower on a (possibly) dismal Monday, we might give it a try. But normally, chasing these things results in a loss, so we’ll probably need more convincing in the form of an even lower price. Irrational exuberance rarely makes money.

At any rate, we’re disinclined to chase anything here. So we’ll be back Monday at which point we’ll get our bearings and maybe pick a few Christmas presents up from Wall Street.

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Terry Ponick
Biographical Note: Dateline Award-winning music and theater critic for The Connection Newspapers and the Reston-Fairfax Times, Terry was the music critic for the Washington Times print edition (1994-2010) and online Communities (2010-2014). Since 2014, he has been the Business and Entertainment Editor for Communities Digital News (CDN). A former stockbroker and a writer and editor with many interests, he served as editor under contract from the White House Office of Science and Technology Policy (OSTP) and continues to write on science and business topics. He is a graduate of Georgetown University (BA, MA) and the University of South Carolina where he was awarded a Ph.D. in English and American Literature and co-founded one of the earliest Writing Labs in the country. Twitter: @terryp17