The Week Ahead: To stimulate or not to stimulate...

Now that Greek voters have decided not to wreck the euro-zone and cause the global economy to collapse (Thanks, Greeks!), the week belongs to the Federal Reserve's Federal Open Market Committee. Unlike Europe, the FOMC tends to be free of drama, so my sense is that we can all stop holding our breaths and resume trading with confidence.

This is one of the FOMC's two-day meetings. The announcement comes Wednesday at 12:30 p.m. Eastern, followed by Fedster forecasts at 2 p.m. and Chairman  Bernanke's news conference at 2:15 p.m.

Last week there was pundit chit-chattery about whether the Fed would resume stimulating the economy -- through QE3 market operations. Bernanke gave no encouragement to the idea in congressional testimony. Wednesday will play into the same meme.

The Fed is always a leading indicator in my book. Other leading indicators on the schedule are:

• Housing starts, at 8:30 a.m. on Tuesday, with focus on building permits for new private homes.
• Weekly jobless claims, at 8:30 a.m. on Thursday, with focus on average weekly initial claims for unemployment compensation.
• The Fed's money supply figures, at 4:30 p.m. on Thursday, especially the M2 numbers.
• And of course, the usual market-based leading indicators: The S&P 500 and the spread between 10-year Treasuries and the Fed funds rate.

The Conference Board will release its leading indicators index at 10 a.m. on Thursday. The index is based on the leading indicators noted above, plus others. 

Other reports of note:

• The Home Builders' housing market index at 10 a.m. Monday.
• Petroleum inventories at 10:30 a.m. Wednesday.
• Existing home sales, covering the greater part of the housing market, at 10 a.m. Thursday.
• The Philadelphia Federal Reserve Bank's survey of business ocnditions within the mid-Atlantic region at 10 a.m. Thursday.

Friday is totally blank. No econ reports are scheduled, making it a good day for fasting and meditation (or a long walk in the park), since presumably there will be little to motivate the market.

Practical trading:

By my rules, as of Monday I can trade July vertical and butterfly spreads along with iron condors,  and September single options and straddles. The short legs of my diagonal and calendar spreads will expire in July. Of course, shares are good at any time.

Good trading!