1/27 Morningline

A slow start to the morning, as is traditional on days when the Federal Open Market Committee has scheduled an announcement (at 2:15 p.m. Eastern). Of course, these days the Fed doesn't really change rates so much as it tweaks expectations as an exercise in applied psychology.

Riddle: A word with two meanings. One is work that keeps one fed. The other is what happens to expectations when people are fed up. . . .

Blue chip stocks (SPY) opened barely budging, if at all, from the narrow range between open and close recorded yesterday, and then slowly began to drift downward. My other indicators are within yesterday's trading range, as is the euro against the dollar (EUR/USD). The dollar is on the move -- weakening -- against the yen (USD/JPY). No new potential pps signals. JCI, which I had considered Tuesday for a possible bull play, has continued falling on the second day after a pps bull signal showed. It now stands 3.5 percent below the close on signal day. You've got to wonder why Person's Proprietary Signal sometimes works, and sometimes doesn't. And is there value in an inconsistent signal?

The thing is, on occasion it performs brilliantly and in advance of the price move. So I'll continue to work with it.

Anyhow, no trade on JCI.

Among my holdings, the PALM covered call position remains in unprofitable territory, right at resistance. With 21 days until the February options expire, I'm still waiting and seeing, as time decay decreases the price I would need to pay in order to buy back the covered call.

Let's run the numbers:

Indicators, at about 10 a.m. Eastern:

• Blue chip stocks (SPY) is trading at $109.20, entered bear mode at close on Jan. 21 (at $111.70)
• Fear index or volatility (VIX) 24.4, bull (bearish for stocks), Jan.21 (22.27)
• Treasury long bonds (TLT) $9.165, bull, Jan. 12 ($90.32)
• Corporate junk bonds (JNK) $37.90, bear, Jan. 13 ($39.85)
• Gold (GLD) $107.50, bear, Jan. 12 ($110.49)
• Oil (USO) $36.57, bear, Jan. 12, ($39.63)

 Forex currency pairs:

• Dollars per euro (EUR/USD) $1.4045, bear, Jan. 15 ($1.4385)
• Yen per dollar (USD/JPY) ¥89.34, bear, Jan. 12 (90.97)

Stock options holdings, February expiry:

• CVS, iron condor (p29/-p31/-c34/c36) $32.78, bear, Jan. 21 ($33.24)
  
• ERTS, iron condor (p15/-p16/-c18/c19)  $16.87, bear, Jan. 22 ($16.27)
  
• PALM, covered call (s/-c13)  $11.00, bear, Jan. 22 ($11.93)

Answer to the riddle: "shrink"
(Eat your heart out, Will Shortz.)






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Topics:
S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, gold, precious metals, oil, petroleum, CVS, pharmacies, drugs, Electronic Arts games, Johnson Controls automotive, Palm smartphone Pixi Pri.