The Stock Index Report by Carley Garner

[carleygarner]

July 29th, 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


More digestion, little momentum


Tumbling Asian markets and freefalling crude oil kept tabs on the U.S. equity rally, but there is a certain lack of enthusiasm behind the selling. Accordingly, there are likely to be a lot of nervous bears in this market....and another extension of the short covering rally isn't out of the question.

The market started the day on bad footing with news from the Commerce Department suggesting that orders for big-ticket items have slide by 2.5% in the month of June. The decline in durable goods orders is being attributed to a lack of demand for commercial aircraft and a struggling auto industry.

It is important to point out that the stock market normally finds a bottom well ahead of the economy. Accordingly, negative economic readings may not necessarily translate into immediately lower stock prices. In fact, mixed economic news may be enough to keep a floor under pricing. According to Russell Croft, portfolio manager at Croft Leominster Investment Management in Baltimore, "There's a good economic number and then there's a bad number and that's probably what you'd expect at this juncture of the recession," he added "Hopefully it's two steps back and three steps forward."

With that said, if you have been following this newsletter you are likely aware that we have not jumped on the bull market bandwagon quite yet. While I think that the rally will eventually resume, I also think that the most recent run has been a little too much too fast to be sustainable without some consolidation. However, I also respect the market's ability to fire one more rally bullet as shorts continue to be squeezed.


It is difficult to pick a direction as the selling pressure has remained moderate at best, but our overall technical levels are identical to yesterday's figures:
We see resistance in the S&P near 988, but it looks as though 995 may relatively likely in the coming sessions. In the meantime, major support lies at 925. The NASDAQ may be headed for 1633 but we would be bearish at such levels. Similarly, the Russell could see prices as high as 558, but the bears should be ready to get involved should we see it.

If you are following the short S&P call recommendation, we recommended to our clients to roll into the 995 calls for August. This lowers the delta on the trade and gives it a bit more breathing room intrinsically. It will also position the trade for a possible roll into September calls if this rally continues to cause grief. If you are interested in this type of trading, you may want to check out the free articles posted on our websites as well as my book "Commodity Options".

* 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 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta


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 -

July 28 - Sell the e-mini NASDAQ at 1630 or better.




*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.

 

[carleygarner]

July 31st, 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


Market on pause; are the highs in?


Today marked the end of a significant month in equities, but one may not have realized it by looking at intraday trade. The month of July saw a rally that, in terms of percentages, was the strongest seen since 2002.

Traders were relatively undecided on the fate of the equity rally following a better than expected advanced GDP estimate for the second quarter but a simultaneous revision downward to first quarter growth. Second quarter Gross Domestic Product is estimated to be a negative 1% as opposed to a negative 1.5% as expected by most analysts. The first quarter GDP was revised to a dismal - 6.4% from what seemed to be an already challenging figure of -5.5%.

While the GDP has been the most promising sign of recovery to date, the latest reports suggests that consumers cut spending by 1.2% in the second quarter. Steven Stahler, president of Stahler Group in Baton Rouge, La. claimes, "We're still not in very good shape in the employment part." Until this turns around, the consumer will have a difficult time leading the economy out of the longest recession since World War II.

We can't rule out another run at the highs and buy stops may even lead to a move a little above 1,010 in the September S&P futures, 1660 in the NASDAQ and 570 in the Russell. However, we have doubts as to whether the market can sustain such levels. That said, don't get overly bearish...the trend is up regardless of what anybody may think the fundamentals suggest.


* 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 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta


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 -

July 28 - Sell the e-mini NASDAQ at 1630 or better.




*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.

 

[carleygarner]

August 5th, 2009

Check out IndianaGrain.com (Indiana Grain Company, LLC: Blogs - Carley Garner Knows Her Options) for the latest review of Carley's book, "Commodity Options"!


Meager pullback, may frustrate the bears again


Despite multiple attempts by the bears, equities refuse to stage a correction. The three-week rally has been resilient, but whether or not it is healthy is another question.

The day's news was questionable at best, but traders likely won't make any dramatic moves until the release of Friday's non-farm payrolls data. In the meantime, they are digesting news that the ISM services index showed more contraction that previously calculated and ADP is predicting more job loss than analysts were looking for.

In recent weeks, buying on dips has been the only profitable trade. I wonder if this trend will continue beyond Friday's data and more importantly beyond earnings season. However, let's face it...myself and many others didn't see the market coming this far this quickly and betting against the bulls has been a tough trade.

According to our weekly chart work, 1010 should mark the short-term high in the September S&P but a daily chart reveals that the rally could extend itself to the 1030 area. Only time will tell how it plays out but the bottom line is that both bulls and bears should play this one close to the chest. A large breakout in either direction is possible and for those on the wrong side it could be very painful.

In the past, the market has been prone to sideways trade ahead of large news events. I feel like that was one of the major contributing factors into today's late session comeback. If my assumptions are true, tomorrow should be a consolidation day in anticipation of an uncertain employment report.
We see resistance in the September S&P futures near the round numbers...1010, 1021 and then again at 1030. It seems like the market wants to go higher before it goes lower, bears should look cautiously toward the mentioned resistance levels. When, or if, prices turn around the first significant area of support is 950 based on current valuations. Resistance in the September Dow lies at 9,310 but if the rally gets "out of control" 9,560 is possible.

If you are following our short option strangle, we recommended that our clients take advantage of the morning dip by rolling the August 995/925 strangles into the September 1045/940 strangle for a credit of about $3 in premium. This slows down the trade and moves the risk comfortably away from the market....for now.

* 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 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta


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 -

July 28 - Sell the e-mini NASDAQ at 1630 or better.
• August 3 - We recommended to buy an August at the money (1630 call) for about $600, this limits the risk of the trade to the premium paid for the option plus commissions and fees.


Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

August 7th, 2009

Check out IndianaGrain.com (Indiana Grain Company, LLC: Blogs - Carley Garner Knows Her Options) for the latest review of Carley's book, "Commodity Options"!


All dips have been buying opportunities


Equities rallied to 10-month highs following a better than expected, but still arguably terrible, employment report. The day's excitement was sparked by news of an unemployment rate of 9.4% and a loss of approximately a quarter of a million jobs. However, stocks don't necessarily need proof of economic growth to move higher all they need is the expectation of such. This is what we are seeing now.

On a side note, Home builder stocks benefited from better than expected earnings from Beazer Home and Goldman Sachs added D.R. Horton to its "conviction buy list".

According to Fred Dickson, market strategist at D.A Davidson in Lake Oswego, Oregon. "Investors are looking for confirmation that the bottom is close and employment is a big piece of it. ISM is another piece, and put that together with durable goods and housing and the mosaic is slowly filling in that the economy is beginning to stabilize. That's exactly what investors are looking for."

Keep in mind that the equity markets look to be pricing in a "V" shaped recovery, but the economic data has not been suggesting that this is the case. Eventually something will have to adjust course in order for the two components to be in sync. Whether the numbers will improve, or stocks take a breather, is yet to be seen but my gut tells me that it will eventually be the later. That said, this has been my assumption for weeks now and I have yet to be right.

In yesterday's newsletter we mentioned that we felt as though the market wanted to go higher before it would move lower, and that proved to be the case. However, we were anticipating a little more weakness on the afternoon reversal. As a result, we can't help be look regretfully higher to our next resistance areas of 1021 and 1030 in the September S&P futures, 9,545 in the Dow and 586 in the Russell.

Have a great weekend!

* 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 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.


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 -

July 28 - Sell the e-mini NASDAQ at 1630 or better.
• August 3 - We recommended to buy an August at the money (1630 call) for about $600, this limits the risk of the trade to the premium paid for the option plus commissions and fees.


Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

August 11th, 2009

Check out IndianaGrain.com (Indiana Grain Company, LLC: Blogs - Carley Garner Knows Her Options) for the latest review of Carley's book, "Commodity Options"!


Traders lock in profits ahead of event risk


The longs have finally been convinced to take some of their profits off of the table. Despite what might have occurred given the dramatic gains, the selling pressure was moderate at best.

Investors are looking forward to the Fed's comments regarding the state of the economy. Oh yeah, and they also might be interested in the interest rate decision. We have been suggesting that the rally has gotten away from what may be the reality, and the Fed's wording could have a large impact on whether the two come back into line.

Going into Treasury auctions, retail sales and the conclusion of the FOMC meeting there doesn't seem to be a clear cut direction. We would rather not speculate on what seems to be nothing more than the same odds faced by a coin toss. The S&P could see prices as high as 1026 and as low as 975 in the coming sessions. If we see 1026, I would be a bear...but as far as becoming a bull I prefer to be patient. Let's see how things play out in the coming days.

If you took the short e-mini NASDAQ as recommended in this newsletter, I hope that you were able to offset with a nice profit this morning (although it didn't quite reach our noted exit point). If not, look to lift the futures position and hold the call option (if you bought it for protection).

Futures traders, keep in mind that just because we don't put daily recommendations out on this newsletter doesn't mean that we can't help you with different and/or more aggressive strategies!

I apologize for the brevity, but I am a bit short on time. My second book is in the production stage and it has me working around the clock. I figure that if the markets don't have to sleep, neither should I!


* 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 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.


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 -

July 28 - Sell the e-mini NASDAQ at 1630 or better.
• August 3 - We recommended to buy an August at the money (1630 call) for about $600, this limits the risk of the trade to the premium paid for the option plus commissions and fees.
• August 10 - We like the idea of trying to take a profit on the futures contract near 1580.
• August 11 - If you weren't able to exit on the dip this morning, look to exit the futures shortly and hold on to the call option (if you bought it).



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

August 14th, 2009

"This book provides a realistic look at trading commodity options without the textbook theoretical approach trotted out in many options trading books. It is a valuable book for all option traders." ~ Your Trading Edge Magazine, in reference to "Commodity Options" written by Carley Garner



Chop, chop, TGIF!



Equities have been trading relatively violently between major support and resistance areas for some time. The choppy, yet directionless, trade has complicated speculation tremendously. As a result, many traders took much of the day off. According to our sources at the CME, there were approximately 10 locals standing in the S&P open outcry pit in late afternoon trade. To put this into perspective, on a busy day there may be as many as 160 and on a slow day somewhere in the 50's. A number below 20 is nearly unbelievable and would seem more realistic in a commodity that "nobody" trades such as oats...not the Big Board!

Stocks were able to shrug off bad news yesterday, but today was a different story. Although the latest inflation data was neutral, the Michigan Consumer Sentiment index was decisively pessimistic and equities quickly reacted. With the consumer being a large part of the economy, their lack of confidence in the recovery will act as a plow in the improvement.

Crude oil fell to its lowest level in two weeks and this most certainly flared the equity selling. Aside from energy stocks dragging the major indices lower, investors have been looking to crude price, specifically demand fundamentals, for hints in regards to the economic recovery.

Our bearings are a bit off on this market. We are looking for an early morning rally to bring the S&P to the 1026 area before the selling resumed. However, a rally wasn't in the cards. If our upside targets in the indices (1025 in the S&P, 1524 in the NASDAQ and 549 in the Russell)are going to be met, it will need to be early next week. Otherwise, it seems like a larger correction may be underway. In the meantime, we see critical support in the S&P near 985 with the next level being around 950. Our next support area in the Russell is still 549 with the next area being 524. NASDAQ traders should look for the next major support near 1525.

Futures traders, keep in mind that just because we don't put daily recommendations out on this newsletter doesn't mean that we can't help you with different and/or more aggressive strategies!

* 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 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.


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 -

July 28 - Sell the e-mini NASDAQ at 1630 or better.
• August 3 - We recommended to buy an August at the money (1630 call) for about $600, this limits the risk of the trade to the premium paid for the option plus commissions and fees.
• August 10 - We like the idea of trying to take a profit on the futures contract near 1580.
• August 11 - If you weren't able to exit on the dip this morning, look to exit the futures shortly and hold on to the call option (if you bought it).
• August 12 - We recommended to try to sell liquidate the long call tomorrow near break-even if possible. If not, take what you can get.
• August 13 - You should be completely out of this trade...and may have done well depending on your exit prices.






*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.

 

[carleygarner]

August 19th, 2009

"This book provides a realistic look at trading commodity options without the textbook theoretical approach trotted out in many options trading books. It is a valuable book for all option traders." ~ Your Trading Edge Magazine, in reference to "Commodity Options" written by Carley Garner


Going nowhere fast


Equities have failed to make progress in either direction despite some impressive selling pressure and equally swift short covering. Choppy price action combined with the upcoming option expiration and notoriously thin seasonal trading volume makes for a tough market to trade.

If it weren't for the weekly crude oil inventory report, it may have been a rather devastating day for equities. Futures traded considerably lower in overnight trade and looked to be headed toward the mid 960's before news of a decline in the nation's oil inventory. The market saw this as a sign that increased demand for crude oil and indirectly a pickup in economic activity.

Aside from oil inventories, there weren't any significant economic releases today. However, Warren Buffet's change of heart in regards to the deficit did get some attention. The Oracle of Omaha believe that the government was justified in using any means necessary to stave off another Great Depression. However, he now sees the recovering economy as a warning signal that the Fed will need to change its ways. He warns that the out of control spending could destroy the greenback and many American's life savings. He noted that Congress is spending nearly twice as much as it is taking in and the U.S. debt is growing by 1% a year.

The lack of news left traders looking to technical analysis for help but indecisive trade likely lead to frustration. We see 991 as the pivot area for the September S&P and today's close above it leaves us leaning slightly higher. However, recent gains on super light volume leaves us lacking confidence. Therefore, we will refrain from trying to pick a direction in a market that seems as though I could get better odds shooting craps down the street (I live in Vegas). Instead, we like the idea of waiting for a rally to the 1020 area as a place to be a bull or a dip to the mid to low 960's to be a bear.

The NASDAQ and the Russell seem to be positioned a little better for the upside. We may reconsider being bearish the NASDAQ on a move back to the mid 1630's and the Russell near the mid-580's, but wouldn't be willing to jump in front of the bus should momentum build up.

If you are following our trade recommendations below, we are still holding the short S&P strangles which are beginning to work out nicely. You should have been out of the NASDAQ trade last week, but if you managed to hold on a bit longer you might have made out much better than we had recommended. The long S&P puts for August turned out to be a losing proposition, but that is why we normally prefer selling options over buying them.

I apologize for not sending out a newsletter yesterday, I have been swamped with the production of my second book "A Trader's First Book on Commodities", which is now listed on Amazon. If you haven't picked up a copy of the first, "Commodity Options", it is also available on Amazon at a great price!

* 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 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.


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 -

July 28 - Sell the e-mini NASDAQ at 1630 or better.
• August 3 - We recommended to buy an August at the money (1630 call) for about $600, this limits the risk of the trade to the premium paid for the option plus commissions and fees.
• August 10 - We like the idea of trying to take a profit on the futures contract near 1580.
• August 11 - If you weren't able to exit on the dip this morning, look to exit the futures shortly and hold on to the call option (if you bought it).
• August 12 - We recommended to try to sell liquidate the long call tomorrow near break-even if possible. If not, take what you can get.
• August 13 - You should be completely out of this trade...and may have done well depending on your exit prices.




*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.

 

[carleygarner]

August 21st, 2009

"This book provides a realistic look at trading commodity options without the textbook theoretical approach trotted out in many options trading books. It is a valuable book for all option traders." ~ Your Trading Edge Magazine, in reference to "Commodity Options" written by Carley Garner


OE and good housing numbers sparks rally


A swift dip in overnight trade was quickly reversed, and resulted in a move that brought the S&P approximately 30 handles from its low. Better than expected housing numbers and comments from Fed chair Ben Bernanke were likely to blame.

However, it felt like there were a lot of bears jumping on the correction bandwagon so I am sure that there were a lot of large bets placed. Now that the squeeze is on they are scrambling. It seems like much of the buying might have been done by short call traders looking to hedge their risk, AKA save themselves from ruin.

Bernanke's verbal declaration that the economy is near recovery gave the light volume rally reason to push even higher. According to the Fad Chair, "The prospects for a return to growth in the near term appear good." On the other hand, he did mention that consumers will continue to struggle to find credit and businesses will find it difficult to obtain financing.

Coming into Friday's session we were looking for higher prices, but were a little surprised at the day's momentum. Although we did state that "If things really get out of hand" the mid 1020's were possible in the S&P. Our relative targets in the Russell and NASDAQ were met in Friday's session and this leaves us leaning cautiously lower into early next week. The next resistance in the S&P lies at 1035 but it seems like a pullback could see a retest of 1000. We see the next resistance in the Russell is near 589ish but feel as though the market is getting near-term toppy. The NASDAQ could see 1655 or so, but we would be bearish from such levels. In the meantime, support could be found at 1608.


* 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 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
• July 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.


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
[email protected]
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.

 

[carleygarner]

August 25th, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th.


The trend is your friend until it ends


The trend is up in equities and fighting it has been a losing battle for the bears; however, the upside seems to be limited. September and October are the last of the "worst sixth months" of the year for equities and they have troubled track records with seemingly high instances of volatility. In fact, the Stock Trader's Almanac refers to October as the Jinx month because it has been the host of several crashes.

It was brought to my attention that today is the 22nd anniversary of the beginning of what turned out to be the crash of '87. As the story goes, the daily (and annual) high in the Dow and S&P were made near noon on August 25th and began retreating from there. It wasn't until 8 weeks later that the magnitude of the slide was made apparent by Black Monday.

The Conference Board's Consumer Confidence index rose to 54.1 to beat analyst expectations. Similarly, the S&P/Case-Shiller index on National Home Prices ticked a bit higher last month but are still rather depressing. To put things into perspective, home prices are near levels seen in early 2003. If it weren't for these two somewhat optimistic announcements I wonder if today would have gone much differently. After all stock index futures slid in overnight trade and seemed to be technically weak in early morning trade. Nonetheless, these are the cards that were dealt and we have to play them.

Keep an eye on Treasuries which continue to grind higher. Although there are some positive aspects of this, namely lower interest rates, it suggests that the bond and note markets are still trading on fear. Why else would investors be willing to purchase low yielding securities?
In a nutshell, Treasury buyers haven't completely come to peace with the idea that the recovery will be as swift and painless as the equity market seems to be suggesting. Eventually, either stock traders or bond traders will have to be proven wrong.

We are sticking with yesterday's comments:

So far our upside resistance areas are holding, we noted 1035 in the S&P, 589 in the Russell and 1655 in the NASDAQ. Based on today's action, it seems as though the path of least resistance could be lower. We are looking for a retest of the 1000 area in the S&P, 565 in the Russell and 1577 in the NASDAQ.

* 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 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
• July 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.
• August 24 - We bought back the 940 puts for $4 in premium to lock in a profit on that leg.


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





*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.

 

[carleygarner]

August 27th, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th.


Eight gains in eight days


The Dow Jones Industrial average stretched its winning streak to 8 on Thursday after overcoming a swift early morning dip. The financial and industrial stocks lead the market higher despite pessimistic news on the health of the banking sector.

The FDIC reported that its fund fell 20% to $10.4 billion in the second quarter to reach its lowest level since 1992. There is some concern that the fund could fall to, or even below, zero as 2009 progresses. The Federal Deposit Insurance Corporation claims that there are no plans to use the Treasury as backing but they say that they can "never say never". The FDIC estimates that bank failures will cost them $70 billion through 2013 which would deplete the fund. So far this year, 81 banks have gone under and it is expected that we will see many more throughout the next few years.

Sideways action will eventually lead to a large break-out but traders in both camps are getting chopped out trying to catch the move. Just as the major indices make new highs, prices fall back into the range and similarly this morning's selling pressure likely lured a lot of shorts into the market only to be "slapped" in the face by reality.

We still think that September and October could see a sizable correction in equities, but it is difficult to determine whether the near-term highs are in or not. Although our resistance areas have proven to be valid we are concerned that there could be another round of buying. If this turns out to be the case, we could see 1045ish in the S&P and 1689 in the NASDAQ. If these levels are reached, however, we would be bears.

For those of you that are flat the market, a 20 point rally could turn out to be a great time to sell calls (if it happens). I like the 1075's for $8 or so in premium. If you are a swing or day trader, this move may also be a good place to initiate a (cautious) short position.


* 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 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
• July 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.
• August 24 - We recommended to buy back the 940 puts for $4 in premium to lock in a profit on that leg.


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 -

August 27 - Let's take a shot....Sell a September e-mini NASDAQ at 1687 OB



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

September 2nd, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th. We will explore whether speculation in stock index futures is more efficient than ETF's.


Calm after the equity storm



Today's session was in stark contrast to yesterday's trade. Tuesday's plunge occurred on the highest volume in months but today's consolidation had little in the way of order flow. Also, the erratic and highly volatile price action in yesterday's session was nowhere to be found. It is possible that the market will be on hold until Friday's job report.

The FOMC minutes of the most recent Fed meeting was released but turned to be a relative non-event as far as the market was concerned. Fed discussions suggest that they believe that inflation is moderate, the job market is still a "concern" and demand for new housing has strengthened. Altogether it was a relatively neutral account of current conditions.

Most analysts are expecting that the U.S. economy lost about 250,000 jobs last month and therefore the market seems to have priced this in. Unfortunately, we have all become accustomed to this type of number and have even began looking at it as a positive sign of recovery. The market seems a bit heavy and this leads me to believe that the odds favor a weak market reaction to the news should the number come out in line with expectations or worse. It might take a surprisingly "positive" figure below 200,000 to avoid another wave of selling.

Given the directionless trade, our overall outlook remains the same as yesterday:





...we think that a minor bounce could be seen before another wave of selling comes in. Don't be surprised to see the S&P move up to the 1010/1012 area before finding resistance. From an intermediate -term perspective we are still looking for lower prices. I see the next downside support in the mid-to-low 970's and depending on the news, 940 may be possible at some point in September.

Our first support in the NASDAQ will come in near 1578 then again near 1561, it seems as though we could see such levels in the next day or two. We noted our first support level in the Russell near 551 and that seems like a real possibility sooner rather than later; the next support level will be 545.

If you are following the short option trade below in the S&P, we recommended that our clients with multiple positions lighten up last week near break-even due to the risks posed. Unfortunately, that turned out to be a mistake but looking back it may have still been a wise decision as a quiet market is capable of just about anything. We recommended that the remaining short September 1045 calls be bought back on today's dip near $5 to lock in a profit on this leg of the trade. It feels good to be out!

If you want to participate in trades like this, alternatives to this or even more aggressive strategies, give us a call. We would love to have you on board. You may also be interested in my option trading book "Commodity Options", currently on sale at Discount Investment and Stock Market Trading Books - Traders' Library and other retail outlets.

* 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 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
• July 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
• August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.
• August 24 - We recommended to buy back the 940 puts for $4 in premium to lock in a profit on that leg.
• September 1 - We recommended to buy back the 1045 calls at $5ish to lock in a profit on this leg. It is nice to be flat this market!


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
[email protected]
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.

 

[carleygarner]

September 8th, 2009

Register at DeCarleyTrading.com for our FREE webinar with the New York Institute of Finance on September 17th. We will explore whether speculation in stock index futures is more efficient than ETF's.


Bulls are back


Merger and acquisition news awoke the sleeping bull. From an investor point of view, if firms are willing to initiate large business transactions then they must be optimistic about the prospects of business going forward. Accordingly, if the "big bucks" are investing the recovery so should the retail trader....right? Well, at least for now that is the current market theme and it seems as though the rally has some room to run. Also helping move the markets higher, the world's largest 20 economies agreed to continue stimulus efforts to aid the global recovery.

Just because it is post-Labor Day, doesn't mean that the volume is back. Looking at the numbers (and my IM list) it appears as though many traders opted for an extra-long weekend. It may take a few weeks to fill the trading desks back up and get back to a more realistic account of price movement. In the meantime, light volume leaves the door open for nearly anything.

While we were trying to enjoy the Labor Day holiday, the overseas markets were soaring. Consequently, the U.S. indices have forged an impressive comeback and appear to be looking even higher. Coming into the weekend, I inaccurately assumed that the selling pressure would continue moderately lower but it is now apparent that despite the fact that our downside targets weren't completely fulfilled it was enough of a correction in the eyes of the market. It now seems as though a retest of the highs is in the works. In-fact, it "feels" as though the light volume could propel the S&P to 1055 and maybe even 1070 if there is supportive news. Keep in mind that the markets tend to start September on good footing but fail later in the month as mutual funds lock in profits ahead of the quarter end. Therefore, we will grow increasingly bearish into the decline.

We are looking for a bit above 1700 in the NASDAQ and 589 in the Russell but we see the possibility for 599.

* 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 -

Flat


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






*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.

 

[carleygarner]

September 10th, 2009

See DeCarley Trading in this September issue of Equities Magazine!


Geithner gives market a boost


A relentless uptrend was given another boost by Treasury Secretary Timothy Geithner's comments on the financial system recovery. Today's gains marked the fifth consecutive day of green prints and could signal follow through buying in early morning trade. Nonetheless, it seems as though some back and filling or maybe even something much larger could be on the horizon.

Gains have been made on light volume and suspect fundamental news. Realizing that the market and the economy are two separate things and it is certainly possible for stocks to rally well beyond the pace of the recovery, it seems as though investors may be running out of reasons to buy...at least for now. Crash? Maybe not, but I wouldn't expect gains to be overly swift from these levels without some type of digestion.

Our clients were recommended to sell calls into the rally, most sold the 1095 or 1090 strikes in the October S&P options for $6.50 to $6.00 respectively. However, those looking for a little more action might be able to buy the following spread for less than $400 and a profit potential of $3000. Go long the November S&P 1030 put, sell the 970 put and then sell the 1100 call. Above 1100 at expiration the risk is unlimited but with the market between 1030 and 1100 the risk is limited to $400. The trade starts making money intrinsically below 1030, breaks even at expiration at 1022 and maxes out at 970 (a profit of $2600 before commissions and fees). It gives traders nearly 70 points in room for error but still allows a respectable profit should the market move lower as anticipated.

If you prefer to trade futures, it seems like the December S&P begins to be an attractive short in the mid-to-high 1040's. We like the downside in the Russell from the mid 590's but just over 600 is possible. The NASDAQ seems a bit toppy near 1688 but I can't rule out a last ditch move to 1720ish.

Thursday was the official roll-over day. You should begin trading December futures!



* 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 -

Flat


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 -

Sell 1 December mini-NASDAQ near 1685




Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

September 14th, 2009

See DeCarley Trading in this September issue of Equities Magazine!


China trade concerns can't hinder rally


Concern over a trade dispute between the U.S. and China triggered overnight selling in the futures markets but the pressure subdued and eventually the markets turned positive. All in all, it was a relatively positive day for the markets and contrary to the expectations of many, the bull is still going strong.

A speech delivered by President Obama seemed to have a positive impact on trade, or perhaps it was simply that it didn't have a negative impact that is important. Mr. Obama warned the financial industry that the days of recklessness is over. He also promised that regulatory reform, in some format, will pass this year.

The U.S government adopted trade penalties on tires coming from China and the Chinese subsequently filed a complaint with the World Trade Commission. Some worry that a tariff war or, worse, a reduction in Chinese Treasury purchases could slow down the already sluggish recovery. After all, China is one of the largest backers of the U.S. financially, if they stop buying our debt or begin selling what they own, rates will skyrocket and so will our national debt. This would make it even more difficult to finance the government "stimulus" projects.

Is option expiration holding this market up, or is it holding it down...? Despite today's recovery, we are still leaning lower. We like the short side of the S&P from about 1055 and the downside of the Russell from just over 600. The NASDAQ seems a bit toppy near 1688 but I can't rule out a last ditch move to 1720ish.

* 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 -

September 10 - Our clients were recommended to sell calls into the rally, most sold the 1095 or 1090 strikes in the October S&P options for $6.50 to $6.00 respectively.


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 -

September 10 - Sell 1 mini NASDAQ at 1683ish



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

September 17th, 2009

See DeCarley Trading in this September issue of Equities Magazine!

I will keep this short and sweet as we are preparing for today's webinar with the New York Institute of Finance (I hope to see you there).


Pause or correction?


The rally took a breather ahead of option expiration but the bulls didn't give up much ground despite technicians calling for an overbought correction. This morning's news was positive, but arguably priced into the action.

According to Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey, "There was some positive economic news that didn't really do anything (for the market), so that's another sign of exhaustion."

According to the government, the net worth of U.S. citizens grew for the first time in the second quarter since 2007. While this seems like a positive, it offers little comfort as the increase in worth was directly related to domestic asset recoveries that have spent the previous two years plummeting. I doubt that many Americans feel as good about their finances as they did in 2007 but beggars can't be choosers.

Either we are in the midst of a blow off top in the stock indices or we are crazy...There are no guarantees that the highs are in, but this particular short squeeze seems to have gone on far too long. In fact, it is among the largest in history. We pled the bearish case in yesterday's newsletter, now all we can do is wait and see what happens. We also want to remind traders that being overly bearish isn't wise; the trend is up and fighting it is an uphill battle. The same warning can be provided to the bulls; financial markets normally don't move in one direction. The lack of back and filling in the recent run up seems to suggest that something is fundamentally amiss. Whether the market turns the corner immediately, or finds a way to rally another 5% before doing so...markets often go down faster than they go up and therefore being a complacent bull could be dangerous.

Crash? Maybe not, but it seems as though a pullback to 1025 in the December S&P is probable.

Many traders avoid entering positions on option expiration, especially on a quadruple witching month. You may want to take tomorrow off.


* 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 -

September 10 - Our clients were recommended to sell calls into the rally, most sold the 1095 or 1090 strikes in the October S&P options for $6.50 to $6.00 respectively.


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 -

September 10 - Sell 1 mini NASDAQ at 1683ish



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

September 18th, 2009

See DeCarley Trading in this September issue of Equities Magazine!


Quadruple witching, zero excitement


I found it ironic that the Associated Press ran a story on today's stock trade with the headline, "Stocks Rise in Volatile Quadruple Witching Trade". The September futures expired this morning on a high note, the rest of the session saw consolidation trade. Looking at volume data and based on communications from the trading floor, most traders simply took the rest of the day off (or perhaps they never showed up in the first place). At one point during the day it was noted that the S&P open outcry pit only had 25 locals standing in it. On a good day, it may have 130 to 150.

Monday's trade is key in that it may be the deciding factor in whether or not this rally can continue from current levels or if some corrective trade is needed. It could be that option (and futures) expiration artificially held the indices up. This can sometimes be the case if there are a lot of option traders caught on the wrong side of a market. For instance, short call traders may look to buy futures against their short call options and in turn force the market higher against their original positions. There is always a chance that expiration actually kept a cap on the rally, but I don't feel that this is the case.

According to Marc Harris, co-head of global research for RBC Capital Markets in New York, the strength of the rally has been a surprise to investors due to the fact that much of the gains are coming from "lower-quality" with "weak balance sheets". He added, "Even turkeys are going to fly in a hurricane," and noted, "Those lower-quality companies are leading the charge here."
Some friends of ours from the CME floor came up with a list of "15 not so good things for the stock market", and I thought that you might be interested.

1. The S&P 500 closed more than 20% above its 200-day moving average yesterday for the first time since May 1983.

2. On a risk adjusted return basis between 1990-2009 for Global Equities vs. USD and 30-yr UST, the standard deviation is historically+/- 2. Currently, this measurement is at an extreme showing 4 standard deviations arguing equities are rich and you should allocate to long UST and USD.

3. For the first time since the recovery off the March lows, high yield credit spreads fell below their "pre-Lehman" levels.
4. The national municipal bond ETF (MUB US) is trading at an all-time high today. The trading in muni's runs counter to the concerns people have about local and state governments. Since most muni's offer tax-free income, the run-up could also be due to worries about the coming increase in taxes.

5. Airlines (XAL Index) are up 12 days in a row..."stop the fraud"
6. T-Bills are yielding 9 bps down from 20 bps recently.

7. Volker says banks should operate in a less risky fashion and no prop trading. Krugman says unemployment in the US will peak in 2011 because of slow recovery. World Bank said the recovery in Emerging Markets is likely to be weak.

8. US Continuing Jobless Claims (INJCSP Index) ticked back up on the weekly chart signaling a more mixed/choppy recovery.

9. DJ Industrials and Utilities Indices made new highs yesterday as did SPX but the Transport Index was negative. This is a Dow Theory bearish divergence.

10. Ikea, the world's biggest home-furnishings retailer, reported its slowest annual sales growth in more than a decade and called 2009 a "challenging" year as consumers cut back on purchases.

11. Zhou Wenzhong, China's ambassador to the U.S. said he "wants to believe" President Barack Obama's decision to impose tariffs on imports of Chinese tires won't start a trade war. "The worst thing would be if this becomes a precedent,"

12. Financials - After the standing room only Barclays conference (read crowded long sector), KBW Inc., the New York-based boutique that advises financial institutions, expects 500 to 1,000 U.S. banks to fail by 2011, Chief Executive Officer John Duffy said.

13. Small Caps - The only thing more volatile than Chinese Small Caps are Chinese NASDAQ Small Caps. The China Securities Regulatory Commission will allow initial public offerings by seven companies in the first batch of sales on the nation's Nasdaq-like board for start-ups.

14. RIMM - Bluefin says US carriers did not see the expected pick-up in sales for back to school season. Aug worst month of yr for carriers, didn't see big back to school pickup that expected. Jul/Aug sell-in below sell-thru.

15. Asia - Sinopharm's IPO drew about $114 billion of orders as Hong Kong investors sought almost 600 times the amount of stock available to them.


* 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 -

September 10 - Our clients were recommended to sell calls into the rally, most sold the 1095 or 1090 strikes in the October S&P options for $6.50 to $6.00 respectively.


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 -

September 10 - Sell 1 mini NASDAQ at 1683ish



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

September 29th, 2009

Visit our websites to register for our next free webinar..."Back to the Basics: Getting Started in Futures"


Consolidation ahead of event risk


Mixed economic news ultimately resulted in mixed trade in the equity market. The major indices made attempts at price moves in both directions, but seemed to be drawn to the unchanged mark.

After what felt like an endless string of relatively optimistic economic readings, the data is beginning to soften up. The question going into the rest of the week's overloaded data calendar is whether or not the market can continue to accept "not so bad" news as good news.

Yesterday's rally was impressive but it was also done on one of the lightest volume days in months. It is hard to put too much credence into a move that few participated in. On the other hand, the fact that the S&P bounced so sharply from our 1035 support area gave the bulls a slight edge coming into the session. Therefore, today's consolidation trade leaves me to believe that the path of least resistance is moderately lower. It appears as though the next logical move would be a retest of the recent lows.

The daily chart points higher but my gut tells me lower. The truth is that unless you have the ability to gauge the upcoming economic releases, picking a direction from here faces the same odds of success as flipping a coin. Our overall consensus hasn't changed from yesterday:

I have strong resistance in the S&P near 1060 then again at 1066. Assuming that these areas hold we should retest 1035 support. If we are wrong and a meaningful break of the noted resistance areas occurs we might be off to the races....again. If this is the case, 1086 is the next stopping point.

Sorry so brief today, we have been swamped and there wasn't much to talk about. We expect that tomorrow will give us more interesting content.

* 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 -

September 10 - Our clients were recommended to sell calls into the rally, most sold the 1095 or 1090 strikes in the October S&P options for $6.50 to $6.00 respectively.


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 -

September 10 - Sell 1 mini NASDAQ at 1683ish

September 23 - If you are looking for something a little more aggressive, you might want to do a bear put spread with a naked leg using the November NASDAQ e-mini options. At the time of this writing, it was possible to buy the 1720 put, sell the 1620 put and sell the 1800 call for even money. In other words, this is a free trade in terms of cash outflow (not considering commissions). However, there is margin of about $3,000 and unlimited risk above 1800. The max profit is $2,000 before considering transaction costs but the best part about it is that your risk at expiration doesn't come in until 1800 so there is plenty of room for error.




Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

October 2nd, 2009

Like what you see? Pick up a copy of Carley's book "Commodity Options" at any major bookstore or online outlet!


Bounce?


The highest unemployment rate since June of 1983 sparked another round of early morning selling pressure. However, as calmer heads prevailed the indices were able to recover from the lows.

The unemployment rate was reported in line with expectations at 9.8%, still below the benchmark 10% but dire nonetheless. For those of us in Nevada, and a few other hard hit states, the rate is between 13% and 14%. What was a surprise to the market was a larger than expected decline in non-farm jobs. The U.S. economy is believed to have lost about 263,000 jobs in September, much greater than the 180,000 consensus estimates.

There is no getting around the fact that the day's news was bleak but it wasn't a complete surprise either. Accordingly, the "payroll panic" in early morning futures trade seemed to be more emotion than anything. In reality, we have dropped from a high of 1065.75 in the e-mini on Tuesday to Friday's low of 1012 and the market went from being overbought to oversold in a matter of a week and a half.

We aren't necessarily bullish but we don't think that the decline will be straight down either. The market may be setting up for a bounce to the mid to high 1040's.

Our clients were advised to sell puts into the volatility this morning...so far, so good but we will see what Monday brings. Specifically, they were recommended to sell the November 890 puts. Fills were coming in from $9.50 (or about $475 per e-mini option minus commissions and fees) to $9.25. We feel good about the trade simply because there is a substantial amount of room for error. At the time of this email, the reverse break even on this trade was over 140 points out-of-the-money. In other words, we can be wrong by this amount and still not lose money on the trade at expiration. The downside of this strategy is the fact that beneath 890 the risk is similar to that of a futures contract and the maximum profit potential is equal to the amount collected. That said, the odds seem to be in favor of this trade....and should the market rally in the near term, we will be quick to take a profit and remove our risk from the table. If you are interested in these types of option selling techniques, you may be interested in my book "Commodity Options" available through all major book outlets.

Check out this video made by our friends at DT Trading. They are our go-to guys for open outcry execution in CME/CBOT products and have a great feel for the markets. They will soon be providing an intraday commentary service to subscribers. I'll keep you posted!

YouTube - Mr Topstep Friday

Perhaps the intermediate-term lows aren't in quite yet, but we think that they are close. Our downside target in the S&P was 1007 but the bounce occurred from about 1012...not too far off. It is possible that we will retest the lows and maybe even a bit lower but we doubt that a complete meltdown will occur. It seems as though a bulk of the selling has already come into play. Look for support in the Russell near 568 and resistance at 595. Similarly, the NASDAQ could see 1640 but we have to lean higher from such levels.

If you are following the NASDAQ trades below, you should be out...if not look for a place to get out Monday morning. If you sold the futures and bought the call, leave the long call and hope for a rebound. If you have the option spread, you should be able to get out with a respectable, but not life-changing, profit $500 to $700 depending on your fills.


* 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 -

September 10 - Our clients were recommended to sell calls into the rally, most sold the 1095 or 1090 strikes in the October S&P options for $6.50 to $6.00 respectively.


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 -

September 10 - Sell 1 mini NASDAQ at 1683ish
• September 30 - This trade is vulnerable, it may be a good idea to place a stop above noted resistance areas but we prefer the idea of buying an October 1720 call as insurance. It will run you about $550.
• October 1 - You should be out of this trade with a decent profit (at any point today you could have offset the futures with a profit ranging from $1000 to $500 before transaction costs and considering the protective call). If you bought the call for protection...keep it. If the market rebounds you can sell it at a better price.

September 23 - If you are looking for something a little more aggressive, you might want to do a bear put spread with a naked leg using the November NASDAQ e-mini options. At the time of this writing, it was possible to buy the 1720 put, sell the 1620 put and sell the 1800 call for even money. In other words, this is a free trade in terms of cash outflow (not considering commissions). However, there is margin of about $3,000 and unlimited risk above 1800. The max profit is $2,000 before considering transaction costs but the best part about it is that your risk at expiration doesn't come in until 1800 so there is plenty of room for error.

• October 2nd - Our clients were recommended to exit this trade this morning. you should be able to get out with a respectable, but not life-changing, profit $500 to $700 depending on your fills.



Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
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.

 

[carleygarner]

October 8th, 2009

"Your book (Commodity Options) just paid for itself 358 times today...I'd call that a good investment any day!!! I'm buying 2 next time"~Jonas Miller. Pick up a copy of "Commodity Options" at any major bookstore or online outlet!


Here we go again...this rally isn't over folks


A good start to the earnings season looks to have greased the way for a retest of the major highs in the indices. Kicking off the good news was a reported profit from Alcoa Inc. The news hit the wires yesterday after the bell and it took a little longer for the futures market to react but sure enough the major indices made their way higher into Thursday morning.

Also helping the market to retain gains after such a strong up-move, U.S. retailers posted their first monthly sales increase in more than a year. The market saw this as a positive sign that consumers might be making their way out of hibernation.

Our initial upside targets haven't changed. We are looking for about 1075 in the S&P, 1745 in the NASDAQ and 625ish in the Russell. At these levels we will be short-term bearish...and then we will re-evaluate from there.

We certainly aren't perfect and we don't have a crystal ball either. Nonetheless, we have managed to call the markets pretty well this year. Here are just a few...Does your broker do this for you?

DeCarley called the March low: http://www.aweber.com/b/n_FR

DeCarley called the July low: http://www.aweber.com/b/1VCxQ

DeCarley were within points of calling the October low: http://www.aweber.com/b/1YWeA



* 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 -

Flat


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
[email protected]
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.

 

[carleygarner]

October 9th, 2009

"Your book (Commodity Options) just paid for itself 358 times today...I'd call that a good investment any day!!! I'm buying 2 next time"~Jonas Miller. Pick up a copy of "Commodity Options" at any major bookstore or online outlet!


Friday was a painfully quiet slow grind higher

Our friends on the CME trading floor mentioned at one point in the day that there were only 30 locals standing in the S&P trading pit, this is about 100 less than what might be seen on a good day. They also mentioned that those that were there, must have been married (aka nothing better to do). I think that this best sums up the uneventful trading session.

The most significant news story of the day was President Obama's victory in the Nobel Peace Prize award but I doubt that the news had anything to do with equity market gains. Instead it seemed to be a continuation of the never-ending short squeeze. Since March, all sell-off have simply been a trap for determined bears and they have been feeling the pain.

The trend is up and it seems like this will be the case going into next week. We see resistance at 1075 then again at 1095 in the S&P. However, we doubt that the market will be able to post gains above the noted levels without some type of pullback. Therefore, the bears should be ready to act but at the same time it is important to get a good entry. We were hoping for a move up to 1075ish today in order to provide traders an opportunity to sell calls and/or buy puts at better prices but the steady but strong close seems to favor a move beyond the original 1075 resistance area. Accordingly, we prefer to be patient; we will see what next week brings.

We are still looking for 1075 in the NASDQ and 625 in the Russell as preliminary objectives. However, there seems to be a good chance that the Russell will reach 635 or so before the rally fizzles.

We certainly aren't perfect and we don't have a crystal ball either. Nonetheless, we have managed to call the markets pretty well this year. Here are just a few...Does your broker do this for you?

DeCarley called the March low: http://www.aweber.com/b/n_FR

DeCarley called the July low: http://www.aweber.com/b/1VCxQ

DeCarley were within points of calling the October low: http://www.aweber.com/b/1YWeA


* 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 -

Flat


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
[email protected]
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.