Tuesday, October 25, 2011

10/26 Almanac

On Wednesday, Oct. 26: Durable goods, new homes.

There are 24 trading days before the November options expire, 52 the December, 87 the January and 115 the February.

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 1.7% in a net move down of 1.5%.

The day's extremes: Open $124.89, high $124.95, low $122.78, close $123.05.

SPY closed below the DeMark pivots after trading within their range. The next DeMark pivots are $121.83-$124.00.

In total, 2.8 billion shares were traded on the three major U.S. stock exchanges, 2% less than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $111.75 and $134.35. The range is +/- $11.30 from the last closing price, 91¢ wider than on the prior trading day.

Bond yields imply that inflation, over the next five years, will average 1.82%, one basis point lower than the prior trading day.

Econ reports

The Commerce Departments reports on durable goods orders at 8:30 a.m. Eastern. These are the big-ticket items that take a non-trivial chunk out of the cash held by people or businesses. If durable goods orders are up, then that means the order-ers are confident that they can afford to pay, often on credit (think, "auto loan").

At 10 a.m., Commerce reports on new home sales. This is the smaller portion of the market compared to existing home sales, and it is no doubt seriously distorted as an indicator because so many fairly new previously occupied homes have come on the market because of the real-estate crash.

Two weekly reports: Petroleum inventories at 10:30 a.m., and for the early birds, the Mortgage Bankers' purchase applications report at 7 a.m.

Treasury auctions 5-year notes at 1 p.m.

No Fedsters are scheduled to speak.

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 February or later straddles, strangles, calls and puts. And of course, shares are good at any time.

Good trading!

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