2/16 Morningline

Long-term bonds issued by the U.S. Treasury (TLT) gapped down half a percent below Friday's close, and then moved back up a bit. The 30-year bond sold at auction for the highest interest rates since 2007. Prices move the opposite direction from rates and include traders' expectations for future interest rate changes.

Blue-chip stocks (SPY) opened higher on the second day of a macd bull signal. Gold (GLD) gapped higher by 2.3%, as did oil (USO), by 2.4% The dollar was stronger against both the euro (EUR/USD) and yen (USD/JPY)

Today opens a busy trading week dictated by the calendar. . .

Friday is the last trading day for February options, and I have positions that require a decision either to close or to allow expiry. Today is 31 days before March options expire, meaning we're entering that prime time window for covered calls, where premiums are reasonably high, but the time risk is reasonably short and the theta, the speed at which the value of options declines, starts to pick up to a gallop, a good thing for option sellers. In addition, my swing trading strategy has turns today and tomorrow, in the general course of the normal cycle. See the "2/16 Swing Map" posting. As always, I'll post separately on each trade as soon as it clears. In this morning's trading all of the indicators I follow, gaps notwithstanding, were trading within the ranges they had set the past few weeks. There were no signal reversals on the macd. The indicators were basically doing what they have been doing, some more dramatically than others. Let's run the numbers . . .

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Indicators, at about 10:00 a.m. Eastern:

• Blue chip stocks etf (SPY) is trading at $108.66, entered macd bull mode at close on Feb. 12 (at $108.04)
• Fear index or volatility (VIX) 23.27, bear (bullish for stocks), Feb. 12 (22.73)
• Treasury long bonds (TLT) $89.91, bear, Feb. 9 ($91.18)
• Corporate junk bonds (JNK) $37.48, bear, Jan. 20 ($39.63) 
• Emerging markets (EEM) $38.98, bull, Feb. 12 ($38.44)
• Gold (GLD) $109.29, bull, Feb. 12 ($107.04)
• Oil (USO) $36.04, bull, Feb. 10, ($36.51)

Forex currency pairs:

• Dollars per euro (EUR/USD) $1.3656, bear, Jan. 20 ($1.4106)
• Yen per dollar (USD/JPY) ¥90.08, bull, Feb. 12 (90.00)

Stock options holdings, February expiry:

• CVS, iron condor (p29/-p31/-c34/c36) $33.26, bull, Feb. 10 ($33.21)
  
• ERTS, iron condor (p15/-p16/-c18/c19)  $16.36, bear, Feb. 9 ($15.96)
• MCO, covered call (-c30) $27.01, bear, Feb. 4 (26.39)
• PALM, covered call (s/-c13)  $9.84, bear, Jan. 26 ($11.17)

Stock option holdings, March expiry:

• CSCO, iron condor (p22/-p23/-c25/c26), $23.82, bull, Feb. 8 (23.50)

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Topics: S&P 500, SPDR, Spiders, Treasury bonds, high-yield corporate junk bonds, emerging markets, gold, precious metals, oil, petroleum, Cisco Systems networking, CVS, pharmacies, drugs, Electronic Arts games, Moodys bond rating, Palm smartphone Pixi Pri.