Tuesday, November 15, 2011

11/16 Almanac

On Wednesday, Nov. 16: Inflation, industry.

There are three trading days before the November options expire, 31 the December, 66 the January and 94 the February.

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


Blue chip stocks (SPY) closed the latest regular session up 0.5% from the prior close. During the day SPY traversed 1.6% in a net move up of 0.7%.

The day's extremes: Open $125.17, high $126.75, low $124.72, close $126.08.

SPY closed within the DeMark pivots after trading above their range. The next DeMark pivots are $125.40-$127.43.

In total, 2.4 billion shares were traded on the three major U.S. stock exchanges, 18% more than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $114.83 and $137.33. The range is +/- $11.25 from the last closing price, 2¢ narrower than on the prior trading day.

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

Econ reports

The Labor Department releases the consumer price index at 8:30 a.m. Eastern, and the Federal Reserve follows with industrial production numbers at 9:15 a.m. These two reports are potentially the major market movers of the day.

Also out, and significant: Treasury's international capital stats at 9 a.m. -- where foreigners are putting their money -- the housing market index at 10 a.m., and petroleum inventories at 10:30 a.m.

The Mortgage Bankers issue their weekly report on purchase applicaions at 7 a.m. -- a leading indicator for housing.

Two Fedsters are at the podium: Richmond Fed Pres. Jeffrey Lacker, an alternate on the Federal Open Market Committee, speaks at 11:15 a.m., and Boston Fed Pres. Eric Rosengren, neither an FOMC member nor an alternate, at 12:45 p.m.

Lacker taught economics at Purdue University before coming to work for the Richmond Federal Reserve Bank in 1989. Rosengren rose through the Fed system as a research economist. He has served as an advisor on Japanese banking.

Both were appointed by President George W. Bush.

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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