Tuesday, November 1, 2011

11/2 Almanac

On Wednesday, Nov. 2: Fed meeting announcement; Bernanke news conference.

There are 17 trading days before the November options expire, 45 the December, 80 the January and 108 the February.

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


Blue chip stocks (SPY) closed the latest regular session down 2.8% from the prior close. During the day SPY traversed 1.6% in a net move down of 3¢.

The day's extremes: Open $122.03, high $123.51, low $121.52, close $122.00.

SPY traded entirely below the DeMark pivots. The next DeMark pivots are $120.77-$122.76.

In total, 3.6 billion shares were traded on the three major U.S. stock exchanges, 34% more than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $109.62 and $134.38. The range is +/- $12.38 from the last closing price, $1.69 wider than on the prior trading day.

Bond yields imply that inflation, over the next five years, will average 1.91%, three basis points lower than on the prior trading day.

Econ reports

The Federal Open Market Committee announces results of a two-day meeting at 12:30 p.m. Eastern, and Fed Chairman Bernanke will hold a news conference at 2:15 p.m.

The Federal Reserve maintains an archive of selected speeches and testimony.

A couple of reports released Wednesday look forward to Friday's unemployment/employment report: The employment report from the payroll company ADP, at 8:15 a.m. -- sometimes treated as a market-moving predictor of Friday's government report -- and the Challenger, Gray & Christmas job-cut report, telling where layoffs are happening, at 7:30 a.m.

Also out, petroleum inventories at 10:30 a.m. and the Mortgage Bankers' purchase applications report at 7 a.m.

Treasury will announce its borrowing needs over the next six months at 9 a.m. -- a big deal for bond traders -- and also near-term requirements for 3- and 10-year notes and 30-year bonds at 9 a.m.

Trading Calendar:

By my rules, at this point in the cycle I can trade Dember vertical and calendar spreads, 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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