Thursday, October 20, 2011

10/21 Almanac

On Friday, Oct. 21: Fedster trifecta.

This is the last day October options will trade. There are 29 trading days before the November options expire, 58 the December, 93 the January and 120 the February.

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


Blue chip stocks (SPY) closed the latest regular session up 0.4% from the prior close. During the day SPY traversed 1.9% in a net move up of 0.2%.

The day's extremes: Open $121.43, high $122.10, low $119.82, close $121.66.

SPY traded entirely within the DeMark pivots. The next DeMark pivots are $120.74-$123.02.

In total, 3 billion shares were traded on the three major U.S. stock exchanges, 6% more than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $109.55 and $133.77. The range is +/- $12.11 from the last closing price, 6¢ wider than on the prior trading day.

Bond yields imply that inflation, over the next five years, will average 1.78%, one basis point higher than the prior trading day.

Econ reports

There are no economic reports on Friday.

Filling the vacuum, sort of, are speeches by three of the Federal Reserve's top policy makers.

Two of the Fedsters, Dallas Fed Pres. Richard Fisher and Minneapolis Fed Pres. Narayana Kocherlakota, are members of the dissenting Gang of Three on the Federal Open Market Committee. The Gangsters have, beginning in August, voted against Chairman Bernanke's proposals to extend the central bank's accomodative monetary policy.

Fisher, who took office under President George W. Bush, had ties to former Secretary of State Henry Kissinger’s strategic advisory firm, the private bank Brown Brothers Harriman Inc., and his own money management firm. 1:20 p.m..

Kocherlakota came to his position under President Obama from an academic career. 1 p.m.

Fed Vice-Chairwoman Janet Yellen, also of the Obama era, is a supporter of Bernanke's policy proposals. She worked in the Clinton administration and had ties to the Council on Foreign Relations. 3 p.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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