Sunday, February 16, 2014

The Week Ahead: Presidents Day, prices, houses, minutes

After a U.S. market holiday on Monday -- President's Day -- the economic reporting machine grinds back to life with a series of releases focused on housing and prices. The three leading forex money centers of London, Tokyo and Sydney will be open for trading on Monday.

Two price reports are scheduled for release, the producer price index on Wednesday and the headline-generating consumer price index on Thursday, each at 8:30 a.m. New York time.

The housing sector will be covered by housing starts, a leading indicator, on Wednesday at 8:30 a.m. and existing home sales on Friday at 10 a.m.

Other top reports on the schedule are Federal Open Market Committee minutes from Jan. 29, the final meeting presided over by former chairman Ben Bernanke, and the Philadelphia Federal Reserve survey of market conditions in the mid-Atlantic region,  on Thursday at 10 a.m.

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. 

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

Although not in itself a leading indicator, the index of leading indicators uses the individual leading reports in calculating a combined index that I find to be a useful "You Are Here" in the business cycle. It will be released Thursday at 10 a.m.

Other reports of interest:

Tuesday: Empire State manufacturing survey at 8:30 a.m., Treasury's international capital report at 9 a.m. and the Home Builders' housing market index at 10 a.m.

Thursday: PMI manfacturing index flash report just before 9 a.m., petroleum inventories at 11 a.m. and the Federal Reserve money supply report at 4:30 p.m.

I also keep an eye on the Baltic Dry Index, updated daily.


San Francisco Fed Pres. John Williams, a Federal Open Market Committee alternate, makes a public appearance on Wednesday.

St. Louis Fed Pres. James Bullanrd, who has no FOMC position this year, speaks on Wednesday and Friday.

Analytical universe

This week I shall be analyzing new bull and bear signals among 299 high-volume large-cap stocks and exchange-traded funds that have some analyst interest.

I shall be traveling in East Asia through late February. To shorten processing time while I'm on the road, I have reduced my analytical universe to the 299 most liquid stocks and exchange traded funds. I shall resume analysis of the large universe, which exceeds 3,000 shares, in late February.

Trading calendar

By my rules, I'm trading March 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 May options for single calls and puts as well as straddles. Shares, of course, are good at any time.

Good trading.

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