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March 11, 2014  Tue 7:15 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
Stocks are down slightly this morning, remaining within a tight range near all-time highs.

S&P 500 futures are off less than 0.1 percent, while European bourses are mixed. Asian markets were modestly positive in the overnight session, led by a 0.7 percent gain in Tokyo.

The S&P 500 has spent the last four sessions churning on either side of 1875 as the heavy flow of earnings and economic news abates. The numbers increasingly paint a picture of strength in the developed West while Asia falters. The United States is also re-emerging as a producer of energy and industrial goods while China is shifting focus from export-oriented smokestack industries to an Internet-based consumer economy. (See our researchLAB analysis tool for ideas on how to trade these trends.)

Today's economic calendar is essentially empty, though earnings focus on retailers such as American Eagle Outfitters, Bon-Ton Stores, and Dick's Sporting Goods. There are few major events scheduled in the next two weeks, but attention will likely focus on Russia's attempt to pry Crimea away from Ukraine. Moscow is pushing for a referendum to be held on the peninsula this Sunday, March 16--a move opposed by western governments.

Every sector except utilities has climbed in the last week. Financials and transports have been the strongest major groups, playing catch-up after weakness early last month. Fuel cells have been the hottest growth area on researchLAB, while oil refiners, light-emitting diodes, and airlines have also outperformed. Homebuilders, iron, coal, steel, office retailers, and 3D printers have lagged.

In company-specific news, DKS fell about 2 percent after fourth-quarter sales missed analyst estimates. E-House China, a Shanghai real estate firm with bullish options activity in recent sessions, is up 8 percent on strong quarterly results. Boyd Gaming rose 11 percent after activist hedge fund Elliot Associates disclosed that it had taken a 5 percent stake in the casino operator. FuelCell Energy surged 17 percent after revenue beat estimates.

Brent crude oil rose 0.27 percent while West Texas Intermediate is down slightly, a price differential that tends to favor refiners. Silver, gold, and copper rose 1.4 percent, 0.6 percent, and 0.4 percent respectively. Currencies are painting a modestly cautious tone, with the euro lower and the safe-haven Japanese yen mixed. Nonetheless, the Australian dollar--usually associated with risk appetite--is inching higher.
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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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