1/29 Almanac

Fair warning: Market news rant below. Illustrated!!!

Friday, Jan. 29, is 21 days before the February options expire, 49 days the March and 77 days the April.

Historically, it tends to be an up day of the week on a down day of the month in an up month. . . .

In this period my rules allow trades in February calendar, butterfly and diagonal spreads, as well as covered calls, and also both February and March verticals. I'm trading April expiration options for unhedged call and put purchases. These economic reports will be released: Gross Domestic Product, 8:30 a.m. Eastern, a measure of the value of the nation's good and services produced at home. In some countries (not the U.S.) it is used to determine when recessions are over. Employment cost index, 8:30 a.m., tells how much it costs to keep a worker, both pay and benefits. If there are a lot of unemployed, qualified workers, I would expect the cost per worker to go down. (Supply and demand in the workplace.) Consumer sentiment, 10:55 a.m., tells how you feel about the economy (or at least how the 500 people polled feel). The U of Michigan and Reuters do this index.

My portfolio consists of:

• CVS, iron condor, p28/-p31/-c34/c36
• ERTS, iron condor, p15/-p16/-c18/c19
• MCO, covered call,  s/-c30
  
• PALM, covered call, s/-c13

Blue chip stocks (SPY) closed the regular session at $108.67, down 1.1 percent from the prior day's close.

Mediawatch: MarketWatch suggested, by juxtaposition, that the Senate's first procedural vote to confirm Bernanke as Fed chairman.'s had something to do with the way the trading went. Sheer nonsense.

Here's a one-minute chart of SPY prices for today (the times are Pacific). The red line marks 15 minutes before close of trading. Where's the Bernanke point?
 

Stocks fell in the morning, before the debate began, and were sideways thereafter. The procedural vote came 15 minutes before the close; the final vote, just after the close. AP says prices moved because of tech sector earnings forecasts and concerns about the British banking system. Well, maybe. Or not.

In total, 4 billion shares were traded on the three major U.S. stock exchanges.

Good trading.




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Topics:
S&P 500, SPDR, Spiders.