Sunday, September 16, 2012

The Week Ahead: Housing, Four Witches

The econ scene this week is tilted toward housing, but frankly, there's no over-arching event to move the markets in a big way.

The conventional wisdom has it that housing will lead the way out of recession. But this time, housing received such a powerful punch to the head that it seems to have knocked the conventional wisdom askew.

The two major housing reports will be released on Wednesday, housing starts at 8:30 a.m. Eastern and existing-home sales at 10 a.m.

A lesser report, the National Association of Home Builders' housing market index is due out Tuesday at 10 a.m.

Friday is a quadruple witching day, meaning that stock index futures, stock index options, stock options and single stock futures all expire. Any trader who hasn't closed September holdings in these instruments had better snap to it.

Leading indicators out this week:

Building permits for new private homes from the housing starts report out Wednesday at 8:30 a.m.

Average weekly initial jobless claims will be reported at 8:30 a.m. Thursday.

Traders also keep track of these financial leading indicators: The M2 money supply, out Thursday at 4:30 p.m. from the Federal Reserve, and two reported continually during market hours: The S&P 500 index and the interest rate spread between 10-year Treasuries and the federal funds rate.

The Conference Board's index of leading indicators, which puts together all of the leading indicators that I track in this section, will be released at 10 a.m. on Thursday.

I also like to keep an eye on the Baltic dry index of world shipping, updated daily.

Other reports of interest:

Monday: Empire State manufacturing survey, from the New York Federal Reserve Bank, at 8:30 a.m.

Tuesday: Treasury's International capital report at 9 a.m., tracking the ebbs and flows of foreign money into and out of the U.S. economy.

Wednesday: Petroleum inventories at 10:30 a.m.

Thursday: The Philadelphia Fed survey of economic conditions in the mid-Atlantic region, at 10 a.m.


... are swarming like flies at a September picnic. Looking only at Federal Open Market Committee Fedsters:

Tuesday: New York Fed Vice-Chairman William Dudley, an FOMC member, and Chicago Fed Pres. Charles Evans, an alternate.

Wednesday: Kansas City Fed Pres. Esther George, an alternate.

Thursday: Atlanta Fed Pres. Dennis Lockhart, a member, and Boston Fed Pres. Eric Rosengren, an alternate.

Friday: Lockhart speaks again. Busy guy!

Trading calendar

By my rules, as of Monday I can trade October vertical and butterfly spreads, iron condors and the short legs of calendar and diagonal spreads, as well as December single options and straddles. Of course, shares are good at any time.

Good trading!

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