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July 15, 2013  Mon 7:11 AM CT

SPX: SEE CHART GET CHAIN FIND STRATEGIES
Stock futures are little-changed this morning after another record close last week.

European markets are trying to inch higher after Asia posted marginal gains overnight. Commodities and currencies are sounding a slightly cautious tone, with oil, copper, and the euro all fractionally lower.

The S&P 500 advanced 0.31 percent to 1680 on Friday. While it was the second record close in a row, the index remains below its intraday peak of 1687 from May 22. The Dow Jones Industrial Average is also below those springtime levels on its respective chart. The Russell 2000 small-cap index has broken out above its all-time highs from two months ago, while the Dow Jones Transports remain below their previous high.

The United States economy appears to be in its best shape in more than half a decade, punctuated by improvements in the job and housing markets and strengthening demand for big-ticket consumer items. Weakness in emerging markets has also helped staunch inflation, giving the Federal Reserve license to keep interest rates low.

Attention today will focus on Citigroup's second-quarter earnings at 8 a.m. ET, followed by national retail sales half an hour later. Both have the potential to impact sentiment. Goldman Sachs, Johnson & Johnson, Mosaic, Coca-Cola, CSX and Yahoo follow tomorrow.

Our researchLAB market scanner shows price performance favoring consumer-discretionary stocks and financials over the last month. Materials have lagged because of weakness in metals stocks.

Oil and copper are both down more than half a percent, and most agricultural foodstuffs are also falling. The declines come after Chinese economic growth slowed to 7.5 percent in the second quarter from 7.7 percent in the first three months of the year.

The Japanese yen is down across the board today, especially against the U.S. dollar. That is potentially bullish for stocks despite the weakness in commodities.

In company-specific news, Leap Wireless is set to more than double after agreeing to be purchased by AT&T. Shares are now trading well above the $15 offer price, so investors apparently think that it will be raised. Calls spiked in the Leap ahead of the announcement late Friday afternoon.
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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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