Day Trading & Forex Forum

carleygarner

July 2nd, 2009


If you like this newsletter, you will love "Commodity Options". Look for great deals on Carley's book through Amazon!


Stocks slump on jobs data


Equities suffered from low volume and poor economic news on the last trading session before the 4th of July celebration. Rumors of a possible North Korean attack on Hawaii, although not necessarily credible, also worked against the markets.

Our prediction that traders would disappear shortly after the release of non-farm payroll numbers seemed to be relatively accurate. Volume was at a bare minimum in post-announcement trade. The headline numbers weren't a big surprise; an estimated 467,000 jobs were lost last month to bring the unemployment rate to about 9.5%. It is important to note that the so called U-6 number, which includes those that have stopped looking for work or who can't find full-time jobs, has climbed to nearly 16%. Suddenly, the green shoots look a little brown. Nonetheless, most of this was expected well before today and therefore the initial reaction looks to be a bit exaggerated by the lack of market liquidity.

The major indices posted losses of nearly 2% by mid-session, while the Russell was down over 3%. The Russell is comprised of small cap stocks, which are often the market leaders. I wouldn't put too much credence into today's trade in light of the volume situation, but it seems that even if we see an oversold bounce on Monday the overall trend is lower. We think that the next target in the September S&P is the mid-to low 880's. In the case of the Russell, 2000 the mid-480's should be the next target and we expect that the NASDAQ could see the 1420 area again in the near future.

For the most part, the markets will be closed tomorrow in observance of the holiday. With that said, the CME Group Globex stock indices (e-mini S&P, e-mini NASDAQ and e-mini Dow) will trade overnight as usual but the session will be halted at 10:30 am Central.

Enjoy your holiday weekend!



**Seasonality is already be factored into current prices, any references to such does not indicate future market action.





S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat




NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat




*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.


There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker

carleygarner

July 7th, 2009


If you like this newsletter, you will love "Commodity Options". Look for great deals on Carley's book through Amazon!


Waiting for earnings season...


It is a slow news week, but traders are gearing up for tomorrow's G-8 meeting and the upcoming earnings season. We will hear from Alcoa and Pepsi Bottling tomorrow but it is next week that traders are looking forward to.

Don't forget that the historical tendency for earnings season suggests that stocks outperform before and suffer from disappointment after the fact. This is similar to a buy the rumor, sell the fact type of scenario that often plays out in markets. However, it seems as though some of the selling has come early this time around and the price pressure may not over yet.

Crude oil dropped for the fifth consecutive day and seems to be dragging equities down with it. Nonetheless, it is difficult to see if the dog is wagging the tail or the tail wagging the dog. In both cases, we are approaching oversold conditions but this is more true of crude than equities. While our models are pointing toward the potential for a bounce from here, we still think moderately lower before this can happen. We have been calling for the mid-to low 70's in the S&P and despite today's valiant attempt at reaching our target, we feel like there is a bit more downside and will continue to look for such levels. Our clients were recommended to sell the August 760 puts for about $6.50 in late day trade.


If you are trading the Russell or the NASDAQ, we are still looking for 468 and 1390 in the September contracts. Because the NASDAQ was the strongest on the way up, it could be the hardest hit on the way down. We would refrain from overly bullish holdings in this market. However, aggressive Russell traders may look to put on bullish positions at or near our noted target.





**Seasonality is already be factored into current prices, any references to such does not indicate future market action.




S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat




NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat





*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.



There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker

carleygarner

July 10th, 2009


If you like this newsletter, you will love "Commodity Options". Look for great deals on Carley's book through Amazon!


Weakness in Crude weights on stocks


Earnings jitters, a weaker than expected Michigan Sentiment index, and a lack of reasoning to be bullish allowed equities to creep lower for much of the day. This marks the fourth consecutive week of losses for the major indices. However, there is a bright side; the selling has been orderly. That doesn't mean that stocks won't continue to decline. In fact, we still think that the mid to low 800's are likely in the September S&P at some point in the next few weeks. However, it does suggest that investors are no longer in the same panicked state experienced in the fall of 2008.

While we have heard earnings reports from a few firms, the season will pick up pace next week. We will hear from Johnson & Johnson, JPMorgan, Google and others. Some fear that even numbers that beat expectations will fail to give stocks a lift. Nonetheless, I believe that the fact that equities spent the four weeks prior to earnings grinding lower the "buy the rumor sell the fact" disappointment may already be accounted for.

On a side note, General Motors Corporation rose from the dead today. Well...they have emerged from bankruptcy protection but many would likely argue that they still aren't showing many signs of life. CEO Fritz Henderson claims that the new GM will focus more on customers. He also mentioned a partnership with eBay in which visitors to the site will be able to purchase vehicles online via their auctioning platform. As a consumer, this doesn't strike me as being a good idea...

While we can't rule out a retest of the lows, or slightly new lows next week, our comments from yesterday are still valid:


We made a rather bold call yesterday, and today's lack of follow through was a bit disappointing. However, we are going to stick with our idea of a higher market...even if it means a retest of the recent lows before a longer lasting rally can ensue. We could be wrong, but we are looking for just under 900 in the September S&P, 500 in the Russell and 1450 in the NASDAQ.


**Seasonality is already be factored into current prices, any references to such does not indicate future market action.




S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

July 7th- We recommended to sell the August S&P 760 puts for $6.50 or better


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat




NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat





*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.


There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker

carleygarner

July 13th, 2009


If you like this newsletter, you will love "Commodity Options". Look for great deals on Carley's book through Amazon!


Stable crude, stocks rally


We have been pointing out the correlation between equities and crude oil and have mentioned that stocks will need a turnaround in the crude pit in order to get a rally going. However, as it turns out...all that the market needed was for crude prices to stop going down. With the August crude contract trading near unchanged for much of the day, a green light was given to buy equities ahead of the bulk of the earnings season.

It seems as though much of the day's buying was short covering and/or buy stop running. Accordingly, it doesn't necessarily mean that investors are expecting positive earnings, but what it does indicate is that the bears are a bit concerned over the possibility of less than horrific earnings.

Most stock market journalists and commentators are attributing the day's gains to comments made by market analyst Meredith Whitney who claimed that Bank of America shares are inexpensive based on the firm's assets. Whitney is highly respected by the bears in that she has offered one of the more pessimistic, and later we discovered accurate, assessments of the banking business. Accordingly, those short bank shares scrambled to exit their positions by buying the shares back. The buying frenzy bled into other sectors and light volume allowed the rally to extend beyond what many thought possible based on last week's trade.

Nonetheless, our predictions were surprisingly accurate...sometimes it is better to be lucky than good! We have reached our target in the S&P of just under 900 and nearly reached our target in the Russell of 500 and 1450 in the NASDAQ. From here we feel like moderately higher prices may be in store for tomorrow as the short squeeze continues but we can't help but feel as though the buying will dry up, at least for now.




**Seasonality is already be factored into current prices, any references to such does not indicate future market action.




S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

July 7th- We recommended to sell the August S&P 760 puts for $6.50 or better


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat




NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat




*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.



There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker

carleygarner

July 15th, 2009

Sign up for a free online webinar tomorrow to discuss Commodity Options vs. Stock Options, and other topics in Carley's book at PFGBest.com.


Nervous bears


Data suggests an uptick in inflation, the Fed declares double digit unemployment is looming but...according to the central bank the U.S. economic is predicted to shrink between 1 and 1.5% this year, and improvement over the previous 1.3 and 2%. The markets may have celebrated today, and we may even get a little more follow through tomorrow as the last of the bulls are suckered in and the bears squeezed out but I have a feeling that there will be some buyer's remorse in the coming days.

According to the Fed's minutes of the last FOMC meeting, it could take "five or six years" for the economy and the labor market to fully recover. However, for 2010 they expect that the economy would grow between 2.1 and 3.3%, instead of the previous expectations of 2 to 3% but I don't think that anyone is going to change their overall investment strategy for a few tenths of a percent.

Inflation is beginning to poke its head up, but the signs are still relatively minor. Nonetheless, the Fed worries that the public will begin to fear inflation in light of the Fed's recent policy of purchasing its own Treasury securities.

Today's rally began on the open of electronic trade on Tuesday evening following an upside surprise in Intel earnings. However, traders were already in a good mood following solid numbers posted by Goldman Sachs.

We really didn't expect the markets to rally this far, this fast but I don't think that anyone really could have predicted such a move. However, we seem to be near significant resistance areas. We think that 930 is critical for the S&P and feel as though aside from the possibility of a moderate overflow of buying into tomorrow's session, the near-term highs are looming. We are looking for a pullback with 916 and then 902 as our support levels. Dow traders may look for a correction that could result in prices near 8,300 should support at 8,420 fail to hold. The Russell on the other hand, looks like it may have a little more room to move on the upside than some of the other indices. We don't see significant resistance until the 520 area.



**Seasonality is already be factored into current prices, any references to such does not indicate future market action.




S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.

July 7th- We recommended to sell the August S&P 760 puts for $6.50 or better

• July 15 - We advised buying this option back for $2 or less, you should be out of this trade with a respectable profit. Don't let this option sit!


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat






*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.


There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker

carleygarner

July 20th, 2009

"I'm not even kissing up when I say it's about the best book on option trading I've read." ~ Aaron James, Eastside Financial Group in regards to "Commodity Options" now available through all major book outlets


Slow trade, squeezing bears


Even the bulls are likely a little surprised by the resiliency of the most recent broad market rally. A positive earnings season and a possible resolution to the CIT insolvency has managed to propel equities nicely higher from last Monday's early session lows.

CIT Group has apparently struck a deal with its bond holders to avoid bankruptcy. This comes after bailout funds requested from the fed failed to come through. The market was pleased with the news given the potential consequences of a failure to many small businesses. Some analysts point out that the fact that the government wasn't forced to intervene and CIT was able to secure private financing suggests that the financial markets are healing.

Earnings have been a pleasant surprise but the bulk of the numbers have yet to be released. Investors will likely be focusing on retail stocks, which haven't been represented as of yet. Poor retailer numbers could trigger a case of buyer's remorse and lead to a swift correction. On the other hand, should retailers have a good showing this rally may have more legs that we originally anticipated. The high 950's don't seem to be out of the question and some of our contacts on the floor note that even 1,000 is possible on the running of buy stops.

I am not convinced that we will see much higher this time around. I tend to favor the idea of, at minimum, a temporary correction that could bring the S&P back to the 908 area. However, the light volume makes for very one directional trade and I worry that the lack of liquidity will work in favor of the short squeeze.


We continue to fight against the grain looking for a correction in equities, but I am not going to lie...we are nervous bears. Last week we noted that a run to the mid 940's may be possible in the S&P and now that we are here it seems like the buying could extend to the mid 950's and maybe even 961. Nonetheless, I am having a hard time jumping on the bull bandwagon...at least for now.

We also pointed out resistance in the Dow near 8,850 and 1540 in the NASDAQ. These levels have quickly come into play, and moderately higher without a pullback is possible but we have to wonder how long this can last. Nonetheless, if this rally resumes the next stopping point will be 8,880 and 1580 respectively.



**Seasonality is already be factored into current prices, any references to such does not indicate future market action.




S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.

July 7th- We recommended to sell the August S&P 760 puts for $6.50 or better

• July 15 - We advised buying this option back for $2 or less, you should be out of this trade with a respectable profit. Don't let this option sit!


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat




NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat





*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.


There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker

carleygarner

July 21st, 2009

"I'm not even kissing up when I say it's about the best book on option trading I've read." ~ Aaron James, Eastside Financial Group in regards to "Commodity Options" now available through all major book outlets


Stocks pull back, but losses minimal


The major indices finally broke their winning streak but the selling pressure was moderate. This may suggest another retest of the highs, or slightly new highs, are in the cards. Despite today's minor digestion, we feel as though a larger correction is looming at some point. However, we also can't rule out a continuation of the squeeze to elect buy stops in the 958 area of the September S&P. If this happens, we could see 960/962 before running out of buyers.

In the meantime, investors are focused on Fed Chairman Bernanke's congressional testimony. The "grilling" started today and will extend through tomorrow. However, the topic of discussion doesn't seem to be anything new and exciting. Although, Bernanke did mention that inflation doesn't seem to be a threat in the coming few years and claims to have the "tools" needed to fight that battle once it begins to emerge.

The market continues to see the CIT story as a positive sign that the economy has turned the corner from government subsidies to private equity financing. However, it has been corporate earnings that have made this rally possible. Caterpillar beat analyst expectations and announced and improved profit forecast for 2009. Due to Caterpillars role in the expansion of industry, it is considered to be somewhat of a bellwether of the global economy.

Either we are early, or we are just plain wrong but we still think that a near-term top is in the cards for the major indices. We are sticking with yesterday's call of an extension of the rally to the mid 950's or possibly the low 960's but at such levels we are highly bearish. That said, there is still a lot of cash on the sidelines and if there are shorts looking for a way out of the squeeze, we are hearing that there are buy stops running all the way to 1,000. Be careful!

If you want to play the downside with limited risk, we like lottery ticket plays such as buying the August 880 or 885 puts. Fills were coming in for the 885's this morning near $6.50.



**Seasonality is already be factored into current prices, any references to such does not indicate future market action.




S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -


July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat




NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat





*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.



There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker

carleygarner

July 27th, 2009


"I'm not even kissing up when I say it's about the best book on option trading I've read." ~ Aaron James, Eastside Financial Group in regards to "Commodity Options" now available through all major book outlets


Stocks consolidate


After an astonishing two-week rally that lifted the major indices approximately 11%, stock market bulls finally took a breather. Perhaps it has come to realization that the positive earnings have been posted on expense cuts rather than strong revenue figures. Nonetheless, the most recent round of earnings reports weren't as optimistic as those released last week. RadioShack Corp. beat analyst estimates (admittedly on cost-cutting) but Aetna Inc. and Honeywell International failed to meet expectations.

What may have been the glue to hold the markets together today, the Commerce Department reported that new home sales rose 11% in June to 384,000 figured on an annual basis. This is the strongest pace since November of 2008, but is still a historically low number. Don't forget that not too long ago this number was near 2 million. Also, sales seem to be the result of price discounts as opposed to a rebounding market. However, sales are trending higher...and this is better than the alternative.

A painful reminder that we are still in a recession, Verizon reported a 21 percent drop in earnings and announced that it plans to cut 8,000 jobs. Adding insult to injury, the firm's COO Denny Strigl stated, "We probably will not have large-scale hiring until we're out of the recession."

For those with extremely long-term views, there are glaring positives. In fact, Fed Chairman Ben Bernanke stated on Sunday that "The silver lining in this whole thing is that people are starting to save more, since they saw what happened with 401(k) investments." He added, "People are adopting good habits, so not only will we be back on track, but the economy will be stronger than it had been before this started. However, if you are viewing the market with a much shorter horizon (as many futures traders do) it seems obvious that this rally has gotten a bit overheated. An "obviously" overbought market doesn't always translate into a correction as one would expect; the bottom line is that the market will do what it needs to do regardless of what you or I think that it should.

With that said, I think that the risk is in being long this market. In recent sessions the rally has been reduced to an annoying grind higher but will be facing significant resistance near the 988 area in the September S&P. In the meantime, even if the rally resumes the market seems vulnerable to a large one to two day pullback and I would hate to be on the wrong side of that. Of course, it is also uncomfortable to be on the wrong side of the rally and that (short covering) has been much of the catalyst for price gains. Even so, there are likely a lot of sell stops lining the downside, if the market cracks and stops are elected it could be a quick move.

Resistance in the S&P lies at 988 and then again near 1,000. Support, on the other hand, should be found near 961 then 940. We see strong resistance in the Dow near 9,163 with support at 8,950 and again at 8,755. NASDAQ traders may look for resistance at 1615 and first support near 1568.

* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.

**Seasonality is already be factored into current prices, any references to such does not indicate future market action.

Please note: A mini S&P chart is used because it is better for charting purposes, but trade recommendations are based the full sized S&P unless otherwise noted.


S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

July 22 - Buy cheap August S&P puts. We like the 880's and the 885's, you shouldn't pay more than $6.50

July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.

July 7th- We recommended to sell the August S&P 760 puts for $6.50 or better

• July 15 - We advised buying this option back for $2 or less, you should be out of this trade with a respectable profit. Don't let this option sit!


Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading


Position Trade -

Flat

Please note: A mini-NASDAQ chart is used because it is better for charting purposes, trade recommendations will denote whether a mini or full sized contract should be used.


NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat


Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701

Stock Index and Bond Futures Trading
- Commodity Broker Redefined


*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.


There is substantial risk of loss in trading futures and options.

Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.

__________________
Carley Garner

Senior Market Analyst/Stocks & Commodities Columnist/Broker