Friday, January 8, 2010

1/11 Lookahead: January options expiration week, economic reports

Monday, Jan. 11, marks the start of expiration week for the January options. They go away at the end of trading on Friday. I'll be looking in a serious way to begin closing out my January options positions beginning Monday, with an absolute deadline of end-of-trading Wednesday.

Expiration tends to put a slight bit of upside spin on share prices (except, of course, when it doesn't).

The February options will have 39 days before the last day of trading, and March options, 67 days.

By my calendar, Monday will be suitable for February calendars, diagonals, butterflies, verticals and covered calls, and for March long calls or puts. Any day is a good day for shares, of course.

We're getting into the next earning season, of course, so I'm being careful when I trade to take the date of an earnings announcement into account. It's a jungle out there.

Four big economic releases next week:

The balance of international trade on Tuesday with potential impact on currencies

Total receipts by retailers on Thursday, testing the idea that it's consumers that will end the recession.

The inflation numbers facing consumers on Friday. If inflation takes a big jump, then, the thinking goes, the Federal Reserve is more likely to approve higher interest rates.

Also on Friday, how much manufacturers are, well, manufacturing. High production means that they see higher demand by those same consumers who are driving the level of retail sales in Thursday's release.

And higher demand by those Thursday consumers, if the Friday producers haven't made enough to meet that demand, means that Friday's prices might be higher, which could lead for greater demand for  Tuesday's foreign goods, if they're cheaper than the U.S.-made stuff.

(See? It's all just one big economy, most of it packed into a single week.)

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