Monday, November 14, 2011

11/15 Almanac

On Tuesday, Nov. 15: Producer prices, retail sales.

There are four trading days before the November options expire, 32 the December, 67 the January and 95 the February.

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


Blue chip stocks (SPY) closed the latest regular session down 0.9% from the prior close. During the day SPY traversed 2.0% in a net move down of 0.6%.

The day's extremes: Open $126.19, high $127.45, low $124.92, close $125.46.

SPY traded within the DeMark pivots before closing below their range. The next DeMark pivots are $123.93-$126.46.

In total, 2.1 billion shares were traded on the three major U.S. stock exchanges, 11% fewer than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $114.19 and $136.73. The range is +/- $11.27 from the last closing price, 40¢ wider than on the prior trading day.

U.S. bond markets were closed on Friday. Bond yields imply that inflation, over the next five years, will average 1.95%, four basis points lower than on the prior trading day.

Econ reports

A one-two punch to the market before the open, with the release at 8:30 a.m. Eastern of the producer price index and retail sales. Producer prices are a leading indicator of inflation. Retail sales are a trailing indicator of our willingness to shop 'til we drop.

Two other reports that might have some market implications -- the Empire State manufacturing survey at 8:30 a.m. -- as goes New York, so goes the nation -- and business inventories at 10 a.m.

Also out, two weekly retail reports: ICSC-Goldman at 7:45 a.m. and Redbook at 8:55 a.m.

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

Fedsters flock fluently this day.

Two represent the extremes of recent Federal Open Market Committee debates.

Chicago Fed Pres. Charles Evans, who speaks at 8:00 a.m., dissented in a November vote to maintain current policies, arguing that the Fed should do more to encourage growth. Dallas Fed Pres. Richard Fisher, who speaks at 12:30 p.m., is one of three FOMC members who dissented during the summer in votes on expanding the money supply to encourage economic growth.

Evans is a child of the Fed system. Fisher's resume shows institutional 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.

Also speaking are two FOMC alternates.

Richmond Fed Pres. Jeffrey Lacker, who speaks at 11:15 a.m., taught economics at Purdue University before coming to work for the Richmond Federal Reserve Bank in 1989. San Francisco Fed Pres John Williams, who speaks at 9:30 a.m., came up through the Fed system.

And one non-FOCM member, St. Louis Fed Pres. James Bullard, will also make an appearance. Bullard, who rose through the Fed system, speaks at 7:30 a.m.

All except Williams took office under President George W. Bush. Williams was appointed by President Obama.

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 December 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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