Monday, October 18, 2010

10/19 Almanac

On Tuesday, Oct. 19: Housing starts.

There are 32 days before the November options expire, 60 the December and 95 the January.

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


Blue chip stocks (SPY) closed the latest regular session up 0.8% from the prior close. During the day SPY traversed 1.2% in a net move up of 0.8%.

The day's extremes: Open $117.74, high $118.67, low $117.31, close $118.64.

SPY closed above the DeMark pivots. The next DeMark pivots are $117.98-$119.36.

In total, 2.7 billion shares were traded on the three major U.S. stock exchanges, 23% fewer than the prior trading day.

Econ reports:

I think of the housing starts report, out a 8:30 a.m. Eastern, as the shovel report, because a housing start happens when the shovel hits to the dirt to begin excavating the foundation.

It's considered a major market mover, potentially, on the theory that one thing leads to another: That first shovel-full of dirt leads to jobs on the housing site and among subcontractors, new orders for lumber and tiles and fixtures and stuff, ultimately a bump for the moving-van company, new furniture for happy family, money put in the bank and in investments accounts, more revenue for the government to do its necesary work, and hooray, the economic recovery is sailing ahead full steam and America once again is pulling together, past partisan bitterness set aside, safe, secure and the leader of a peaceful world.

All of that from one little shovel digging into the earth. How cool.

Also out, a couple of retail sales reports: ICSC-Goldman on comparable store sales at the big retail chains at 7:45 a.m., and Redbooks look at chain and department stores and at the discounters, at 8:55 a.m.

The industrial production report, sometimes a major market mover, will be released at 9:15 a.m. Eastern.

Also up, Treasury's report on foreign moneyflows into and out of the United States, also known as the "Does China Still Love Us?" report. The housing market index will be released at 10 a.m.

Looking further into the week, housing starts on Tuesday and the Philadelphia Fed survey on Thursday. No reports on Friday, but the G20 finance ministers are meeting in Korea.

Trading Calendar:

By my rules, at this point in the cycle I can trade November vertical, calendar, diagonal and diagonal spreads, and also iron condors. I can sell November covered calls, and trade December straddles, calls and puts. And of course, shares are good at any time.

What I'm looking for:
  • NLY: A rise above $18.40 or so for re-entry on the bull side. Analysis.
  • IDCC: A break above $30.67 for entry on the bull side. Analysis.

Fast Trading Watchlist stocks:
  • Bull: CMG, ENP, IDCC, LVS, MO.
  • Income: AOD, NLY.

Slow Trading Watchlist stocks:

Good trading!

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