Monday, October 17, 2011

10/18 Almanac

On Tuesday, Oct. 18: Producer prices, Bernanke speech.

There are four trading days before the October options expire, 32 the November, 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 down 1.9% from the prior close. During the day SPY traversed 2.1% in a net move down of 1.4%.

The day's extremes: Open $121.99, high $122.55, low $119.93, close $120.23.

SPY closed below the DeMark pivots after trading within their range. The next DeMark pivots are $118.77-$121.39.

In total, 2.6 billion shares were traded on the three major U.S. stock exchanges, 7% more than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $108.92 and $131.54. The range is +/- $11.31 from the last closing price, $1.42 wider than on the prior trading day.

Bond yields imply that inflation, over the next five years, will average 1.73%, one basis point higher than the prior trading day.

Econ reports:

The Labor Department will release the producer price index at 8:30 a.m. Eastern, a preview of Thursday's consumer price index. Both inflation reports have the potential to move the markets.

Treasury reports on international capital flows into and out of the country at 9 a.m., and the Home Builders release their broad housing market index at 10 a.m.

Two weekly retail reports will be out: ICSC-Goldman at 7:45 a.m., and Redbook at 8:55 a.m.

Treasury will auction 4- and 52-week bills at 11:30 a.m.

Fed Chairman Ben Berrnanke gives a speech, at 1:15 p.m., on the effects of the recession on central bank doctrine and practice.

Another Fedster, Atlanta Fed Pres. Dennis Lockhart, is also scheduled to make a public appearance. Lockhart is an alternate member of the Federal Open Market Committee. He took office under President George W. Bush. His resume shows institutional ties to Citigroup (then called Citicorp/Citibank), Heller Financial and the private equity firm Zephyr Management L.P.

The Federal Reserve maintains an archive of speeches and testimony.

Trading Calendar:

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

Good trading!

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