The Prepared Mind 4.18.2011

            Market behavior the past week mirrored the previous week  The major trading indices shed little light  on the future direction of the markets.  The S&P 500 (SPX) closed at 1319.68, down 8.49 or -0.64%,  the NASDAQ 100 (NDX) closed at 2,307.58, down 13.60 or - 0.59%, the Russell 2000 closed at 834.98, down 5.91 or -0.74%, and the Dow Jones 30 Industrials closed at 12,3.  Implied volatility for the indexes - SPX (VIX). RUT (RVX) and NDX (VXN) - hit recent lows and closed down for the week.  This volatility move is far more compelling for me.  As a volatility trader. I am every bit as interested in volatility moves as I am in moves in the price of the underlying.  The move downward was significant enough to compel me to take profits and close all my short volatility positions.  At times, doing nothing is the most valuable alternative on my list of strategies.

            The chatter has picked up among the market pundits.  Are we posed for a market pullback or is this a pause on a continued bull move upwards.  The market news is a cacophony of competing opinions which has deteriorated to choruses of   "Is too" and "Is not."  The noise on CNBC must rival the noise my parents heard from their Irish brood as we traveled cross country in a 1966 Dodge Coronet 440 station wagon.  The mute button is the modern equivalent of my Dad's demands we sit on our hands and be quiet.  The primary difference is my remote  is more effective. in muting dissent.

            You are reading the wrong blog, if you are looking for directional guidance. The earnings season starts in full force this coming week.  These earnings combined with the associated conference calls and the economic reports for the week will provide us with far more guidance than any individual analyst.  Assume nothing.  Do not allow preconceived expectations to dictate your strategies and adjustments.  Remain focused.  Anticipate market moves with measured responses.

Have a good trading week.  Be focused.  Know where you are and where you might be going.  Remember:

  Chance favors the Prepared Mind." - Louis Pasteur

This week's economic news:

Monday April 18:

Economic: National Association of Home Builders Housing Market Index - 10:00
Earnings:  Eli Lilly (LLY)  - BMO, WW Grainger (GWW) - MO, Halliburton (HAL) - BMO, Citigroup (C) - BMO, Gannet (GCI) - BMO
Other:  US Tax Returns must be filed by midnight.
 Tuesday April 19:
Economic:  ICSC Goldman Stores Sales - 7:45, March Housing Starts - 8:30,  Redbook - 8:55
Earnings:  Johnson & Johnson (JNJ) - BMO, Goldman Sachs(GS) - BMO, US Bancorp (USB) - BMO, Intel (INTC) - ATC, Cree (Cree) - ATC, IBM (IBM) - ATC, Intuitive Surgical (ISRG) - ATC, VMware (VMW) - ATC
Other: 
Wednesday April 20:
Economic:  MBA Purchase Applications - 7:00, March Existing Home Sales - 10:00.
Earnings: Union Pacific (UNP) - BMO, AT&T (T) - BMO, United Technology (UTX) - BM), Freeport- MCM Copper & Gold (FCX) - BMO, Abbot Labs (ABT) - BMO, Wells-Fargo (WFC) - BMO, Apple (AAPL) - ATC, Qualcomm (QCOM) - ATC, Amgen (AMGN) - ATC, American Express (AXP) - ATC

Thursday April 21:
Economic:  Initial Jobless Claims - 8:30, Philadelphia Fed Survey - 10:00, FHFA House Price Index - 10:00, Leading Indicators - 10:00.
Earnings: All earnings will be announced BMO - Before Market Open:  BlackRock (BLK), General Electric (GE), McDonalds (MCD), Morgan Stanley (MS), Schlumberger (SLB), Newmont Mining (NEM, Verizon (VZ), Honeywell (HON), DuPont (DD), Pnc Financial Services (PNC), Philip Morris (PM)

Friday  April 22:
U.S. Markets are closed in observance of Good Friday - Banks Open.