carleygarner
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April 1st, 2010
April Fool's rally?
There were very few traders at work by afternoon trade so we will keep this short and sweet...
The first day of the quarter and the first day of the month was a large success for the bulls, but it was also April Fool's day. Perhaps tomorrows holiday release of the monthly employment report will determine the market's fate. As you know, we have been wrong for the last 40 or so points of this rally but countless long and hard looks at the evidence makes it difficult to be a bull at these prices. Accordingly, it seems like being a very picky bear might be a better play.
This means waiting for rallies to significant resistance areas before entering and being willing to take quick profits. We still believe that this market will have to give a substantial amount of this rally back but it is impossible to determine when and where it will happen.
Be careful tomorrow, the pits are closed and the electronic futures will be closed at 8:15 Central...this is just enough time for the markets to react to the data.
Coming into the session we were looking for resistance at 1177 in the S&P and it held nicely but that doesn't mean that we can't see 1184 on the numbers in the morning. That said, we feel like the market might be running out of bullets and the charts are telling us that 1184 will be tough to break (and hold).
If you are following our short option trading, we advised our clients to roll out any of the remaining short April 1185 calls into the May 1215 calls for a small credit. This moves the risk away from the market and lowers the delta considerably.
Good luck and enjoy the holiday 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 can be applied to either the full-sized S&P or the mini. Unless otherwise noted, profit and loss will be based on the mini version.
S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
February 19 - Our clients were advised to sell the April 1165 calls for about $7.50, fills were coming in near $7.25 and a handful at $7.50.
March 5 - Clients with ample margin and guts, were recommended to add to this position by selling the 1165 calls for $9.50.
March16 - Clients were advised to roll half of their short call position into the April 1185/1100 strangle.
March 17 - Clients were advised to roll the remaining 1165 calls into the May 1190 calls to give the market some breathing room.
March 31 - Clients were advised to buy back the short 1100 puts for $1.75 in premium
April 1 - Clients were recommended to roll any existing April 1185 calls into the May 1215 calls for a small credit (about .50). This moves the risk away from the market and lowers the delta considerably.
Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
March 9 - Sell 1 June mini Russell @ 682 OB
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 -
March 3 - Sell 1 e-mini NASDAQ at 1878 or better
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
*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.
April Fool's rally?
There were very few traders at work by afternoon trade so we will keep this short and sweet...
The first day of the quarter and the first day of the month was a large success for the bulls, but it was also April Fool's day. Perhaps tomorrows holiday release of the monthly employment report will determine the market's fate. As you know, we have been wrong for the last 40 or so points of this rally but countless long and hard looks at the evidence makes it difficult to be a bull at these prices. Accordingly, it seems like being a very picky bear might be a better play.
This means waiting for rallies to significant resistance areas before entering and being willing to take quick profits. We still believe that this market will have to give a substantial amount of this rally back but it is impossible to determine when and where it will happen.
Be careful tomorrow, the pits are closed and the electronic futures will be closed at 8:15 Central...this is just enough time for the markets to react to the data.
Coming into the session we were looking for resistance at 1177 in the S&P and it held nicely but that doesn't mean that we can't see 1184 on the numbers in the morning. That said, we feel like the market might be running out of bullets and the charts are telling us that 1184 will be tough to break (and hold).
If you are following our short option trading, we advised our clients to roll out any of the remaining short April 1185 calls into the May 1215 calls for a small credit. This moves the risk away from the market and lowers the delta considerably.
Good luck and enjoy the holiday 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 can be applied to either the full-sized S&P or the mini. Unless otherwise noted, profit and loss will be based on the mini version.
S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
February 19 - Our clients were advised to sell the April 1165 calls for about $7.50, fills were coming in near $7.25 and a handful at $7.50.
March 5 - Clients with ample margin and guts, were recommended to add to this position by selling the 1165 calls for $9.50.
March16 - Clients were advised to roll half of their short call position into the April 1185/1100 strangle.
March 17 - Clients were advised to roll the remaining 1165 calls into the May 1190 calls to give the market some breathing room.
March 31 - Clients were advised to buy back the short 1100 puts for $1.75 in premium
April 1 - Clients were recommended to roll any existing April 1185 calls into the May 1215 calls for a small credit (about .50). This moves the risk away from the market and lowers the delta considerably.
Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
March 9 - Sell 1 June mini Russell @ 682 OB
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 -
March 3 - Sell 1 e-mini NASDAQ at 1878 or better
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
*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.
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