Tuesday, February 1, 2011

2/2 Almanac

On Wednesday, Feb. 2: Treasury borrowing, employment preview, petroleum inventory.

There are 17 days before the February options expire, 45 the March and 73 the April.

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



Stats

Blue chip stocks (SPY) closed the latest regular session up 1.6% from the prior close. During the day SPY traversed 1.2% in a net move up of 1.0%.

The day's extremes: Open $129.46, high $130.97, low $129.38, close $130.74.

SPY traded entirely above the DeMark pivots. The next DeMark pivots are $130.06-$131.65.

In total, 2.8 billion shares were traded on the three major U.S. stock exchange, 12% fewer than on the prior trading day.

Five-year bond yields imply inflation at 2.35%, up four basis points from the prior trading day.


Econ reports:

Treasury announces its funding needs for the next two quarters at 9:00 a.m. Eastern. This is not considered to be a market-mover as such, but...

...it is a big deal for the bond market, because it tells how much competition there will be for borrowing, and therefore impacts interest rates.

...it is a big deal for politics and the partisan squabbling in Congress, because the amount of borrowing Treasury does impacts the amount of the federal debt, a hot-button issue in some conservative quarters.

...and also, it is a big deal for the economy in general, because the federal bond market has such huge influence, and also, as a matter of confidence in the government's fiscal health.

Enough with the ellipses. Onward...

The payroll processing company ADP releases its national employment report at 8:55 a.m. This is a preview of sorts of the government's employment and unemployment rate report, scheduled for release on Friday. More jobs stuff: Challenger, Gray & Christmas release their layoffs report at 7:30 a.m.

The weekly petroleum status report is out a 10:30 a.m. This may take on outsized significance, given the nervousness over the situation in Egypt. About 2% of the world's oil transits that country's Suez Canal.

The Mortgage Bankers release their report on purchase applications, a leading indicator for housing, at 7 a.m. Eastern.

Federal Reserve Gov. Elizabeth Duke gives a speech about her journey "from community banker to central banker". I'm guessing, not a market-mover.


Trading Calendar:

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


What I'm looking for:
  • XLE: Possibly add to my existing positions.
  • XLP, VAR: Seeking an exit.

Click here for stocks on my Watchlist.


Good trading!

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