The Week Ahead: Durable goods and housing

Durable goods orders, out at 8:30 a.m. Eastern on Friday, are the top report in a fairly sparse week of economics.

Durable goods are the big-ticket capital items that cost a bundle and are typically used for several years. Think TV set. Or a back-hoe. They are a confidence measure of sorts because a decision to buy expensive things means that the buyer has some faith that the money won't be needed for more immediate needs, like food and shelter and a Netflix subscription.

Three other major reports will be released. Two are out on Wednesday: Existing home sales at 10 a.m. and the Federal Open Market Committee minutes of its April 30-May 1 meeting at 2 p.m. The third, new home sales, will be released at 10 a.m. Thursday.

Existing homes -- pre-owned? -- are the greater part of the housing market. New home sales track a narrower slice of this important sector but leads existing home stats by a couple of months. So one trade off between the two as an indicator is greater timeliness (new) vs. a larger statistical sample (existing).

Also, any home is the embodied result of a wide stream of spending and activity. Like a baby, it has a huge impact in relation to its size. A new home is an addition to the housing stock, meaning it embodies new spending whose ripples are spreading now. An existing home is the embodiment mainly of old spending whose ripples were spreading back in the day but which have largely subsided by now.

The FOMC minutes give the most detailed thinking available into the thinking and possible disagreements among the men and women who set monetary policy.

Also big on the monetary policy side of things, Federal Reserve Chairman Ben Bernanke testifies at 10 a.m. on Wednesday before Congress' Joint Economic Committee.

Leading indicators (in descending order of importance):

The interest rate spread between 10-year Treasuries and the federal funds rate, reported continually during market hours.

The M2 money supply, at 4:30 p.m. Thursday.

The S&P 500 index, reported continually during market hours.

Average weekly initial jobless claims, at 8:30 a.m. Thursday.

Other reports of interest:

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

Thursday: Purchasing Managers manufacturing index flash release, just before 9 a.m.

I also follow the Baltic dry index, released daily, tracking the volume of global maritime shipments of coal, iron ore, grain and other raw materials.

Analytical universe

This week I'll be analyzing new bull and bear signals among 2,328 stocks and exchange-traded funds that have some analyst interest. They are traded both on the major U.S. exchanges and over-the-counter. My universe is selected from mid-cap stocks and larger, defined as market capitalization of $1 billion and greater.

Trading calendar

By my rules, I'm trading June options for short vertical  and butterfly spreads, iron condors and the short legs of covered calls and diagonals as well as August options for single calls and puts. Of course, shares are good at any time.

Good trading!