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August 23, 2013  Fri 7:15 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
U.S. stock futures are fractionally higher this morning after the market rebounded on a strange day that saw the Nasdaq exchange halt trading for three hours because of technical problems.

S&P 500 and Nasdaq 100 futures are both positive pre-market trading, gradually improving in the last hour. The indexes closed yesterday with healthy gains of 0.86 percent and 0.99 percent respectively despite the NDX outage, which has yet to be explained.  

European equities are mixed after rallying yesterday on strong PMI numbers in the region. The U.K. FTSE is up about 0.5 percent, while the German DAX and France's CAC are roughly flat.

Asian markets were mixed as well overnight, but by far larger percentage differences. Japan's Nikkei soared 2.2 percent, while Hong Kong's Hang Seng and the Shanghai Composite reversed earlier gains to finish lower by 0.15 percent and 0.47 percent respectively.

Commodities are showing only fractional changes this morning. Crude oil has been fluctuating on either side of the $105 level, while the spot price of copper is positive for the second day in a row. Silver is lower by 0.35 percent and gold by 0.2 percent.

The U.S. dollar higher against most other major currencies, including the Japanese yen. A lower yen is usually bullish for equities.

There is only one economic release scheduled for today, new-home sales for July at 10 a.m. ET, with a consensus forecast of 487,000. Attention will also be focused on Federal Reserve Vice Chair Janet Yellen, who will be moderating panel discussions at the central bank's annual meeting in Jackson Hole, Wyoming.

In corporate earnings, Foot Locker is up modestly after releasing quarterly numbers this morning. Other companies scheduled to report today are apparel company Ann, closeout retailer Big Lots, and sporting-goods chain Hibbett Sports.

Teen retailer Aeropostale is falling nearly 14 percent after reporting weak numbers and guidance after yesterday's close. Online-radio service Pandora is down almost 7 percent.
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Sweet Spot Exceptions

As discussed last week, when using the Stock Replacement Strategy to replace a stock position to trade direction, we want to use an option that has very similar characteristics to the stock. We talked about using the deep in-the-money, 80 to 85 delta option that is similar in the Greeks and has relatively little extrinsic value which tends to work against us in stock directional trading.

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