Friday, November 18, 2011

11/21 Almanac

On Monday, Nov. 21: Existing home sales, congressional super-committee.

There are 26 trading days before the December options expire, 61 the January, 89 the February and 117 the March.

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


Blue chip stocks (SPY) closed the latest regular session down 0.1% from the prior close. During the day SPY traversed 1.0% in a net move down of 0.4%.

The day's extremes: Open $122.50, high $122.75, low $121.47, close $121.98.

SPY traded entirely within the DeMark pivots. The next DeMark pivots are $121.09-$122.37.

In total, 2.6 billion shares were traded on the three major U.S. stock exchanges, 15% fewer than on the prior trading day.

Implied volatility suggests a 68% chance that SPY will close, 30 days from now, between $110.81 and $133.15. The range is +/- $11.17 from the last closing price, 95¢ narrower than on the prior trading day.

Bond yields imply that inflation, over the next five years, will average 1.75%, five basis points higher than on the prior trading day.

Econ reports

The Realtors release statistics on existing home sales at 10 a.m. Eastern. This snapshot of the bulk of real-estate transactions is a potential market-mover.

But most likely the major impact on trading during the week will be the bi-partisan congressional super-committee, charged with producing a deficit reducing budget for an up-or-down vote, with the penalty for failure being large across-the-board cuts in federal spending -- a very painful one-size-fits-all solution.

The super-committee faces two deadlines; by Monday it must tell the Congressional Budget Office of the financial impact of any plan they come up with, and by Wednesday it must submit its official report to the House and Senate.

Also out, largely free of impact, the Chicago Federal Reserve Bank releases an index of national economic activity at 8:30 a.m.

Treasury auctions 3- and 6-month bills at 11:30 a.m. and 2-year notes at 1 p.m., and announces requirements for 4-week bills at 11 a.m.

Atlanta Fed Pres. Dennis Lockhart, an FOMC alternate who took office under President George W. Bush, makes a public appearance at 2:30 p.m. Prior to becoming a Fedster, he had ties to Citigroup (then called Citicorp/Citibank), Heller Financial and the private equity firm Zephyr Management L.P.

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

Markets are closed Thursday for Thanksgiving Day, which scrunches the econ reports to unusual days of the week: gross domestic product and the Federal Open Market Committee minutes on Tuesday; durable goods, personal income and outlays and jobless claims on Wednesday; and the Federal Reserve balance sheet and money supply reports on Friday.

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

Enjoy the weekend!

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