Wednesday, October 19, 2011

10/20 Almanac

On Thursday, Oct. 20: Jobless claims, existing home sales.

There are two trading days before the October options expire, 30 the November, 58 the December and 93 the January.

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


Blue chip stocks (SPY) closed the latest regular session down 1.2% from the prior close. During the day SPY traversed 1.9% in a net move down of 1.0%.

The day's extremes: Open $122.38, high $123.08, low $120.71, close $121.13.

SPY closed within the DeMark pivots after trading below their range. The next DeMark pivots are $119.74-$122.11.

In total, 2.7 billion shares were traded on the three major U.S. stock exchanges, 4% fewer than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $109.08 and $133.18. The range is +/- $12.05 from the last closing price, 93¢ wider than on the prior trading day.

Bond yields imply that inflation, over the next five years, will average 1.77%, two basis points lower than the prior trading day.

Econ reports:

A busy Thursday for econ reports. The three big ones: Weekly jobless claims at 8:30 a.m. Eastern, existing home sales at 10 a.m., and the Philadelphia Federal Reserve's economic survey, also at 10 a.m.

Not a market mover but a report I find useful in judging trends: Leading indicators, at 10 a.m.

Also out, the Bloomberg consumer comfort index at 9:45 a.m., natural gas report at 10:30 a.m., and two from the Fed: The balance sheet and money supply, both at 4 :30 p.m.

Treasury auctions 30-year inflation-indexed bonds (TIPS) at 1 p.m., and announces funding requirements for 3- and 6-month bills and 2-, 5- and 7-year notes at 11 a.m.

The Fedsters are out in full force, like a great flock of migrating birds, changing the fates and fortunes of millions with each beat of their sleek, well educated wings.

Two are members of the Federal Open Market Committee and so warrant close attention. They both took office under President Obama.

Minneapolis Fed Pres. Narayana Kocherlakota came to the Fed from academia. He is one of the Gang of Three who have, since August, dissented in votes to extend the central bank's accommodative monetary policy. 8 p.m.

Fed Gov. Daniel Tarullo, prior to coming to the Fed, had institutional ties to the Clinton administration and the late Sen. Teddy Kennedy. 6 p.m.

Two are alternate members of the FOMC. Both took office under President George W. Bush.

Atlanta Fed Pres. Dennis Lockhart's resume shows institutional ties to Citigroup (then called Citicorp/Citibank), Heller Financial and the private equity firm Zephyr Management L.P. 12 noon.

Cleveland Fed Pres. Sandra Pianalto, pre-Fed, had institutional ties early on to the U.S. House Budget Committee. After that, she came up through the Fed system. 12:50 p.m.

One -- St. Louis Fed Pres. James Bullard -- doesn't sit on the FOMC. Also a Bush appointee, he rose through the Fed system before beign named to his present position. 10:15 a.m.

The Federal Reserve maintains an archive of selected 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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