Tuesday, October 26, 2010

10/27 Almanac

On Wednesday, Oct. 27: Durable goods, new homes.

There are 24 days before the November options expire, 52 the December and 87 the January.

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


Blue chip stocks (SPY) closed the latest regular session up 0.02% (2¢) from the prior close. During the day SPY traversed 0.8% in a net move up of 0.5%.

The day's extremes: Open $118.10, high $118.84, low $117.87, close $118.72.

SPY traded closed within the DeMark pivots after trading below their range. The next DeMark pivots are $118.30-$119.27.

In total, 2.8 billion shares were traded on the three major U.S. stock exchanges, 4% more than on the prior trading day.

Five-year bond yields imply inflation at 1.72%.

Econ reports:

The durable goods report will be released at 8:30 a.m. Eastern. It's a measure of consumer confidence -- consumer also including big corporations -- because durable goods are things that are used for a long time (as opposed to ephemerals, like a cup of coffee at Starbucks). For durable goods sales to rise, people have to be confident that they can spare money from meeting immediate needs in order to tie it up money in a long-term resource. Sometimes a market-mover, especially as we all try to figure out if the recovery is in fact taking hold.

New home sales are out at 10 a.m. This is a government report, not something from the Realtors, and it tracks the smaller part of the housing market. Most home sales are for existing homes (as the jargon goes -- it means someone has already lived there before).

Also, petroleum inventories at 10:30 a.m. are important for the energy sector, and the mortgage bankers purchase applications report at 7 a.m. is a leading indicator for housing.

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 January 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.

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

Good trading!

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