Monday, August 16, 2010

8/17 Almanac

On Tuesday, Aug. 17: Housing starts, producer prices, industrial production.

There are 4 days before the August options expire, 32 the September and 60 the October.

On the jump, market stats, econ reports, and the trading calendar . . .


Blue chip stocks (SPY) closed the latest regular session down 0.05% from the prior close. During the day SPY traversed 1.3% low to high in a net move up of 0.6%.

The day's extremes: Open $107.57, high $108.61, low $107.18, close $108.26.

SPY opened below the DeMark pivots but closed within their range. The next DeMark pivots are $107.72-$109.153.

In total, 2.4 billion shares were traded on the three major U.S. stock exchanges, 4% fewer than on the prior trading day.

Econ reports:

A triple whammy on Tuesday (45 minutes that will shake the world?):

Housing starts and producer prices will be released at 8:30 a.m. Eastern, and industrial production figures 45 minutes later at 9:15 a.m.

Housing starts tracks, well, the starting of new housing by homebuilders. Starts have been falling or stagnant for at least three years. The statistic is considered to be a leading indicator of economic activity. Of course, it's only as good as the homebuilders' assessment of their future markets. They guys can be wrong!

Producer prices tracks how much stuff costs the folks who make other stuff that ends up on the store shelves, for you, Confident Consumer, to buy. It covers both big stuff ("capital goods") and small stuff ("consumer goods"). The idea is if the producers are having to pay more for stuff, then they'll recover that cost, at least in part by raises prices on the stuff you buy. Which is true, but with a major "but". Consumer prices aren't based on production cost. They're based on what the market -- that's you -- is willing to pay. And right now, other reports suggest, consumers aren't all that willing to pay too much.

Industrial production is basically how much the nation's factories are making, and it's broken down by industry groupings and tells capacity utilization. It is, overall, a very nice report. However, as with housing starts, industrial production is a predictor of economic growth/decline that's only as good as the factory managers' foresight. They get it wrong, they have over production, and more people lose their jobs.

Small fry: A comparable store sales report by the International Council of Shopping Centers and Goldman Sachs. It's an early bird, out at 7:45 a.m.

Trading Calendar:

By my rules, at this point in the cycle I can trade September iron condors, covered calls and diagonal, butterfly, calendar and vertical spreads. Also, October straddles and single calls or puts. Shares, of course, are good anytime.

Enjoy the weekend!


  • psar - Parabolic Stop and Reverse
  • adx - Average Directional Index
  • pps - Person's Proprietary Signal
  • ma20 - 20-day moving average
  • macd - Moving Average Convergence-Divergence
  • sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

  • trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
  • adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
  • psar, pps, macd: green for bull mode, red for bear
  • sto: green for overbought, red for oversold, yellow for the neutral zone.

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