Sunday, December 22, 2013

The Week Ahead: Personal income, durable goods, new home sales

Wednesday is Christmas in New York, London and Sydney. While it is not a holiday in Tokyo, business there is starting to wind down for the coming New Year's holiday.

U.S. markets will close early on Tuesday, at 2 p.m. New York time.

And yet, there are economic reports of significance: Personal income and outlays on Monday and durable goods orders on Tuesday, both at 8:30 a.m., and new home sales on Tuesday at 10 a.m.

All have an impact on the terrain within which we trade, although they are of far less import than last week's Fed announcement that it would begin tapering off its economic stimulus and the end-of-the-week upside surprise on the GDP.

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:

Monday: Consumer sentiment at 9:55 a.m.

Thursday: Petroleum inventories at 11 a.m.; the report will be moved from Wednesday because of the holiday.


It is a week when the Federal Reserve glitterati abandon the speaking circuit. They will, no doubt, on the night before Christmas ensure that their stockings are hung by the chimney with care, in hopes that fresh jobs data soon will be there.

Analytical universe

This week I shall be analyzing new bull and bear signals among 2,361 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 January options for the short legs of vertical, diagonal and calendar spreads and covered calls, and for all legs of butterfly spreads and iron condors. I'm trading April options for single calls and puts as well as straddles. Shares, of course, are good at any time.

Happy holidays, and good trading!

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