Crude Oil is also sharply higher, up 1.4%, while its counterpart in the oil patch – Natural Gas – is down 2.5% to $1.966. Natural Gas is by far the largest losing of the main futures markets, with the next closest – coffee – down just 0.6%.

After-the-bell earnings are not yet on the radar, but may become towards the end of the trading day. IBM, Intel (INTC), and Yahoo! (YHOO) are the major plays there. IBM has beat expectations by an average of 1.8% over the past four trailing quarters. So, we should expect another strong number there. We’ll really be looking at YHOO, with the potential to move the most. The stock is in a beaten up, built up pattern that could see good volatility. Should be fun.

Break-even:  I breakeven on this trade if CEDC closes at $4 by April 20, 2012 and at $3.65 by May 18, 2012.

Unprofitable: I lose money on this trade if CEDC closes under $4 by April 20, 2012 and above $3.65 by May 18, 2012.  The most I can lose on this trade is the Price of the Spread, $.35.  

Reason I Like This Trade:  I like selling front month premium and buying back month premium with only a few days to go until expiration. In this strategy, I will make money as long as CEDC does not rip higher between now and Friday, because the April options will decay faster than the May options.  

UPDATED 4.23.2012  On Friday, I announced in the LIVE trading room that I sold my May 4 Puts for $.60 and the April Puts expired worthless, so I turned $.35 into $.60 for another HUGE winner at KOTM.

Read more about minus by www.keeneonthemarket.com

In economic data, housing starts fell to a 5-month low in March – showing annualized starts of 654,000, compared with expectations of 705,000. At the same time, the report showed higher demand for building permits, which is at the highest level since September 2008. Most of this growth is seen in multi-family units. Later this morning, Industrial Production will be released at 9 a.m. ET.

In futures markets, it looks to be a good day to be long risk. S&P 500 and DJIA front-month futures gained 0.6% ahead of the official market open. Crude Oil is also higher on the session, gaining 1%, while Natural Gas continues to experience selling at a $2-handle. Prices today are down 1.3% to $1.989. Currency markets are little changed overnight – EUR/USD is trading at 1.3134, USD/JPY at 80.55, and GBP/USD at 1.5940.

After the bell, IBM, Intel (INTC), and Yahoo (YHOO) report earnings. Keep an eye on those stocks during the trading day.

– Spirit Airlines (SAVE) price target to $27 from $21: Dahlman Rose

– M&T Bank (MTB) price target to $90 from $87: FBR Capital

– Groupon (GRPN) price target to $11 from $14: Ascendiant Capital Markets

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Today was not a good day to be in Sugar, Cotton, or Coffee futures, down 4.5%, 4.3%, and 2.4%, respectively. The US$ was moderately lower, losing ground against EUR as U.S. traders shrugged off losses overnight. USD/JPY fell 50 pips to 80.43, after touching a low of 80.28.

Crude Oil futures were up slightly. Natural Gas futures reclaimed and closed above the $2-handle – gaining 1.8% on the session. Heating Oil, though, suffered steep declines of 1.7%.

Earnings tomorrow morning will be the focus. Here’s a list of the most prominent companies reporting before the bell:

– Coca-Cola (KO)

– Goldman Sachs (GS) 

– Johnson & Johnson (JNJ)

– Northern Trust (NTRS)

– State Street (STT)

– TD Ameritrade (AMTD)

– U.S. Bancorp (USB)

After the bell, traders will look to IBM, Intel (INTC), and Yahoo (YHOO) for more corporate earnings news.

Markets digested upbeat retail sales figures this morning that were followed by disappointing manufacturing and housing reports. Additional housing data will be out later this week – tomorrow (housing starts) and Thursday (existing home sales) – which will paint a more complete picture of the overall market. 

In currency markets, EUR/USD is at session highs after concerns over Spain’s fiscal situation pushed the pair below 1.30 early in the session.  A daily close on the pair below the Ichimoku Cloud at 1.3054 could indicate further selling pressure in the sessions ahead. Gold is weaker on the session as well, down 0.7% to $1,649.10 per ounce.

Natural Gas has regained a $2-handle, trading up 1.3% at $2.007. Crude Oil is down 0.4% to $102.47.

My thinking is that we are basically done trading for the day. All-in-all, markets will look towards earnings reports tomorrow morning before the bell and to the Europe situation. 

Meanwhile, the economic picture in the U.S. looks a little better this morning. March retail sales showed a 0.8% increase, compared with expectations of 0.3% and following a 1% increase in February. According to the report, electronics, clothing, and furniture stores were among the main beneficiaries. 

Equities are discounting the European situation, with the S&P and NASDAQ front-month futures trading higher by 0.6%, while the DJIA futures gained 0.7%. Crude oil futures are trading flat on the session, and Natural Gas futures gained 0.3%. 

In conjunction with an emphasis on Spain, EUR/USD is lower in trade, falling below 1.30 for the first time since January. If EUR/USD closes below the Ichimoku Cloud – 1.3054 on the daily chart – it could spur additional selling in the pair. 

In earnings news, Citigroup (C) reported this morning that sales and profits were lower than analysts forecast. Quarterly earnings per share were at $0.95, compared with expectations of $1. Despite this, C was able to keep expenses flat year-over-year. Tomorrow will be a blockbuster day for earnings, with Coca-Cola (KO), Goldman Sachs (GS), and State Street (STT) among the heavy hitters reporting before the bell.