Wednesday, October 26, 2011

10/27 Almanac

On Thursday, Oct. 27: Gross domestic product.

There are 23 trading days before the November options expire, 51 the December, 86 the January and 114 the February.

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


Blue chip stocks (SPY) closed the latest regular session up 1.0% from the prior close. During the day SPY traversed 2.1% in a net move down of 4¢.

The day's extremes: Open $124.35, high $124.77, low $122.21, close $124.30.

SPY closed above the DeMark pivots after trading within their range. The next DeMark pivots are $121.98-$124.54.

In total, 3.2 billion shares were traded on the three major U.S. stock exchanges, 16% more than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $113.66 and $134.94. The range is +/- $10.64 from the last closing price, 65¢ narrower than on the prior trading day.

Bond yields imply that inflation, over the next five years, will average 1.88%, six basis points higher than the prior trading day.

Econ reports

The Commerce Department makes a first attempt at calculating the 3rd quarter gross domestic product -- the advance release -- at 8:30 a.m. Eastern. This ponderous beast gives the most complete look at the state of the U.S. economy, and it can be a market-mover. Personally, given its extreme backward-looking nature, I don't find it to be a compelling report to inform my trading.

Two other major reports are on the calendar: Weekly jobless claims, also at 8:30 a.m., and the Realtors' pending homes sales (contract signed, not yet closed) at 10 a.m.

Also out, Bloomberg's consumer comfort index at 9:45 a.m., the natural gas report at 10:30 a.m. and two weeklies from the Federal Reserve -- the balance sheet and the money supply -- at 4:30 p.m.

Treasury auctions 7-year notes at 1 p.m. and announces funding requirements for 3- and 6-month bills at 11 a.m.

The Fedsters remain in seclusion, allowing the European finance ministers and heads of government to dominate global headlines as they prove that they can be even more ineffective than the American government. A comforting thought, actually, that there is this one area where the United States cannot claim to be #1.

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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