Tuesday, February 15, 2011

2/16 Almanac

On Wednesday, Feb. 16: Producer prices, housing starts, industrial production, Fed minutes.

There are 3 days before the February options expire, 31 the March and 59 the April.

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


Blue chip stocks (SPY) closed the latest regular session down 0.3% from the prior close. During the day SPY traversed 0.7% in a net move down of 0.01%.

The day's extremes: Open $133.02, high $133.22, low $132.32, close $133.01.

SPY closed below the DeMark pivots. The next DeMark pivots are $132.22-$133.12.

In total, 2.9 billion shares were traded on the three major U.S. stock exchange, 4% more than on the prior trading day.

Five-year bond yields imply inflation at 2.31%, up three basis points from the prior trading day.

Econ reports:

A triple whammy of major reports: The producer price index and housing starts, both at 5:30 a.m. Eastern, and industrial production at 9:15 a.m.

Producer prices track inflation before it gets passed on to you and me, the consumers. So it can be considered a leading indicator of inflation, but only if one assumes that increased producer costs all get passed on to the end buyer, a fairly shaky assumption in my book.

A housing start is what happens when the shovel first hits the dirt at a home construction site. It shows builders' assessment of the future market for housing.

Industrial production is rooted in the Rust Belt days when manufacturing was king -- an index how much stuff is being made.

Also out, petroleum inventories at 10:30 a.m. -- big for the energy sector -- and the weekly mortgage bankers purchase applications at 7 a.m.

Capping the day, the Federal Open Market Committee releases minutes of its most recent meeting, at 2 p.m. Eastern.

Trading Calendar:

By my rules, at this point in the cycle I can trade March vertical, diagonal, butterfly and calendar spreads, iron condors and covered calls. Also, April or later straddles, calls and puts. And of course, shares are good at any time.

Good trading!

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