DeCarley Trading Stock Index Report

March 5th, 2010

According to Warren Buffet, risk comes from not knowing what you are doing.  Unfortunately, I have had a front row seat to the carnage that can occur in misguided speculation.  Before you put your hard earned money on the line, join me on March 18th for a behind the scenes look at what really impacts a commodity trader’s bottom line and to discuss topics from “A Trader’s First Book on Commodities” : http://www.nyif.com/courses/crcn_1104.html

Double top for stocks or double trouble?

The drawback of writing a newsletter with relatively strong opinions in market direction is the substantial risk of being wrong…or in this case just early (we think).  Unfortunately, our crystal ball was a bit cloudy earlier this week.  We were right about the rally, but didn’t anticipate it moving quite this far.

Our 1125 objective in the S&P has come and gone and while we still feel like the market will see a reversal sooner rather than later, we cannot overlook the possibility of a retest of the January highs.  This would put the S&P just under 1150…or even moderately higher.  The Russell on the other hand, has already surpassed its recent highs and is now trading in territory not seen since late 2008. 

There are very valid arguments for the bear camp that are being overlooked (or over run) by this rally, but sometimes fundamentals simply don’t matter.  The market is panicked…shorts are panicking and being squeezed out and the last of the sidelined cash is panicking to get in.

The employment numbers weren’t positive, but their implications were.  They jobs picture is bad enough to prevent Fed rate hikes but it isn’t bad enough for investors to recall the possibility of a double dip recession.  Nonetheless, some analysts are vocalizing the opposite.  “Eight months into the much-touted recovery, the economy should be adding jobs not just losing jobs at a slower pace,” noted Peter Morici, an economist for the University of Maryland. 

There is some resistance in the S&P near 1138 but 1148 seems very possible target before a reversal can occur.  The NASDAQ is facing resistance near 1900, and in the Russell this equates to about 669.

* 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.

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 -

March 3 – Sell 1 e-mini NASDAQ at 1878 or better

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

http://www.DeCarleyTrading.com

http://www.ATradersFirstBookonCommodities.com

*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.

February 23rd, 2010

Check out Carley’s recent radio interview with Vince Rowe discussing her new book “A Trader’s First Book on Commodities”and curent market issues:

Segment 1 http://toinvestsmart.com/2010/021910/021910_1.mp3

Segment 2 http://toinvestsmart.com/2010/021910/021910_2.mp3

Long awaited pullback in stock index futures

The light volume rally seemed to be suspect, and investors were looking for a reason to sell.  This morning they got what they were looking for with a much weaker than expected consumer confidence index.  The accumulating sell stops greased the pullback to leave the March S&P trading nearly 23 handles off of its overnight high. 

According to the Conference Board, its consumer confidence index dropped to 46 in February vs. a 56.5 reading in January.  If consumers act as poorly as they feel, retailers could suffer.  The news overshadowed optimistic earnings reports from the likes of Home Depot, Sears, Macy’s and Target. 

If you were following overnight trade in the S&P, you were likely taken back by the sharp mid-night reversal.  This occurred on a headline across the pond stating that the Bank of England describes England’s recovery as “fragile”.  Also, German’s business confidence index dropped for the first time in 10 months. 

After seeing the overnight rally reverse (just short of our resistance numbers), it appears as though the selling could continue in the intermediate term.  Our first support in the March S&P futures will be near 1088/1085 area, but a close below this could lead to a slide to 1052ish.  That said, markets rarely go straight up or down so traders should be prepared for some rather large bounces on the way down.  We see resistance near 1103 and then again just over 1115. 

If you are trading the Russell, we had been looking for a possible pullback to 607 but the market faces strong support near 619 and we will need to see a close below this price to keep the bears in control. 

The NASDAQ faces support near 1780, but a close below this could lead to a slide to the 1718 area. 

* 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. 

Russell Futures and Options Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat

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

NASDAQ Futures and Options Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

http://www.DeCarleyTrading.com

http://www.ATradersFirstBookonCommodities.com

*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.

February 18th, 2010

Visit www.ATradersFirstBookonCommodities.com for info on Carley’s latest book!

Equities creep higher, but rally might stall soon

You could say that it was an optimistic Philly Fed manufacturing index that promoted higher equities, but it probably wasn’t.  After all, a much hotter than expected reading on producer prices could have been enough to trigger a roll-over in stocks.  We believe that it was light volume and a large pocket of buy stops above 1100 in the S&P paved the way for an extension of the rally.  Nonetheless, we have our doubts in regards to substantial gains from here. 

According to the Philadelphia Federal Reserve, it’s manufacturing index rose to 17.6 from 15.2 in January.  On the other hand, Wal-Mart reported a drop in quarterly sales and dropped sales and revenue forecasts.  Also, the Labor Department reported an increase in the weekly jobless claims and inflation concerns were rekindled with a much hotter than expected PPI reading. 

A late day announcement by the Fed surprised the overnight session that resulted in a 9 handle sell off in the S&P.  The fed announced that it is raising the discount rate by .25% to .75%.  While this doesn’t necessarily have a large impact on rates or corporate earnings, it does symbolize the Fed’s eagerness to get things back to “normal”.

Prior to the announcement, we were looking for moderately higher prices before a market reversal but the knee-jerk reaction leaves us a little less confident in another wave of buying.  It is hard to say whether the highs are in, but we are likely close.  We like the idea of selling on rallies; look for resistance in the S&P near 1115ish and near 632 in the Russell and 1836 in the NASDAQ.

Our clients were recommended to sell S&P calls in afternoon trade, but our asking price was accounting for a move in the March futures to 1110 or higher.  Accordingly, the order was unable to fill…and it seems as though the Fed might have interfered with our speculative plans….stay tuned. 

* 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 - 

January 21 – Our clients were advised to sell the March S&P 1000 puts today following the drop in an attempt to capture the market volatility in the put premium.  Fills were coming in from $8 to $9. 

• February 17 – Clients were advised to exit this position today to lock in a profit.

   

   

   

   

  Russell Futures and Options Trading Recommendations

  **There is unlimited risk in naked option selling and futures trading

   

   

   Position Trade -

   

   

  Flat

   

   

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

   

    

   

  NASDAQ Futures and Options Trading Recommendations

  **There is unlimited risk in naked option selling and futures trading

   

   

  Position Trade -

    

  Flat

   

  
  Carley Garner

  Senior Analyst / Commodity Broker

  DeCarley Trading

   cgarner@DeCarleyTrading.com

   1-866-790-TRADE

   Local : 702-947-0701

   www.DeCarleyTrading.com

   www.ATradersFirstBookonCommodities.com

   

   

   

  *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.

   

   

  Last 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.

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

February 10th, 2010

Last chance!! Sign up for our FREE webinar “Extreme Trading: Counter-Trend Option Selling”

http://www.pfgbest.com/webinar/eventSummary.asp?skey=338208184

Stocks hold yesterday’s gains

Despite shaky early morning trade, the equity markets managed to hold on to most of yesterday’s moderate gains to score a small victory for the bulls.  Nonetheless, it is clear that there is still some underlying weakness and even if a rally can materialize in the next few days it might not last. 

Investors are in “wait and see” mode as the European Union discusses the possibility of a bailout of Greece.  According to sources, Germany would not be allowed to help Greece as doing so would be a violation of European Union law. 

Adding to an already heavy market, investors weren’t pleased with Bernanke’s “exit plan”.  According to the Fed Chair, “These changes…should be viewed as further normalization of the Federal Reserve’s lending facilities, in light of the improving conditions in the financial markets.” 

The Fed plan includes raising rates at the discount window (the rate that the Fed charges banks to borrow funds) in order to restrict money flow.  Perhaps what the market doesn’t like is the Fed’s intention to pay banks more interest on Reserve funds as a means of enticing them to lend less.  Have you tried getting a mortgage lately?  Good credit history and money in the bank doesn’t mean much to lenders anymore. 

We are cautiously sticking with yesterday’s call:

Given the sporadic trade, we can’t rule out a retest of the lows but we can’t help but lean a bit higher here.  We are still looking for 1085 in the March S&P, but depending on news 1100 is possible.  If you are trading the Russell, similar levels are 604 and 615 and in the NASDAQ at 1773 and 1810.

* 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 -

January 21 – Our clients were advised to sell the March S&P 1000 puts today following the drop in an attempt to capture the market volatility in the put premium.  Fills were coming in from $8 to $9. 

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 -

 January 27 – Buy 1 e-mini NASDAQ near 1781

• February 3 – Place an order to exit this trade at 1830 OB

   

  ·         February 9 – Change the exit order to 1798

   

•  

• Carley Garner  

• Senior Analyst / Commodity Broker

   DeCarley Trading

   cgarner@DeCarleyTrading.com

   1-866-790-TRADE

   Local : 702-947-0701

     

  www.DeCarleyTrading.com

   www.ATradersFirstBookonCommodities.com

   

     

  *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.

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

   

February 5th, 2010

Sign up for our FREE webinar “Extreme Trading: Counter-Trend Option Selling”

http://www.pfgbest.com/webinar/eventSummary.asp?skey=338208184

Panic selling in equities followed by panicked buying

After melting through 10,000 with ease, the Dow clawed back on the close to settle slightly above.  The March Dow futures contract failed to reach the milestone but it is clear that there will be no free lunches for the bears. 

There are no shortages of hedge fund blowups and many believe that it was the liquidation of leveraged commodity and stock positions that enabled such a dramatic fall from grace.  At one point today, the S&P was approximately 60 points off of yesterday’s highs.  We haven’t gotten to the capitulation seen in 2008 fueled by fund and small speculator margin calls and the subsequent liquidation but this has certainly been a reminder that complacency has no place in these markets. 

Market psychology has changed, most traders have adopted a “sell rally” policy but that doesn’t mean that the market will go straight down.  In fact, there were rumors of a large and well known bank buying a total of 600 S&P futures late on Friday.  Assuming a value of 1050 in the March contract, that is about $262,500 per contract…I’ll let you do the math. 

In the January issue of Futures Magazine, we were quoted several times in reference to our opinion of “Hot Markets of 2010″.  In the article we predicted a large upside breakout in the U.S. dollar early in the year and later noted that such a move would put pressure on the metals and grains.  In this newsletter, we have mentioned several times that a stronger dollar would be trouble for domestic stock indices.  Unfortunately, we don’t always follow our own advice…If you are following our short put option recommendation, we are growing slightly anxious but are not yet uncomfortable.  Despite spikes in volatility and put premium, we feel as though a relatively large bounce is looming and this will be just what we need to exit the position favorably.  Luckily, as an option seller your timing and price speculation doesn’t have to be perfect!

Our weekly chart is pointing to 1020 in the S&P, but we think higher before lower.  The last time around, the rally fell short of our targets…we will see how things pan out this time.  We are looking for a rebound in the S&P to 1085 and possibly even a bit over 1100 if the news is supportive.  If you are trading the Russell, similar levels are 604 and 615 and in the NASDAQ at 1773 and 1810.

On a lighter note… http://www.cnbc.com/id/15840232/?video=1405435640&play=1

* 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 -

January 21 – Our clients were advised to sell the March S&P 1000 puts today following the drop in an attempt to capture the market volatility in the put premium.  Fills were coming in from $8 to $9. 

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 -

January 27 – Buy 1 e-mini NASDAQ near 1781

• February 3 – Place an order to exit this trade at 1830 OB

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

*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.

February 1st, 2010

Carley’s new book, “A Trader’s First Book on Commodities” is now available at all major book outlets!

Stocks finally sizzle without the fizzle

The equity markets had several things going for it on Monday; it was the first trading day of the month, it was “mutual fund Monday” and it was technically oversold.  The real test will come tomorrow. 

After several early morning rallies that eventually failed and made way for further declines, equities finally managed to put together a green session in which gains were held into the close.  According to our research, a majority of the small speculators are holding short positions and we believe them to be the most fickle of the classifications.  Failure for sellers to come to market tomorrow, could lead to a surprisingly sharp short-squeeze.  Consistent trade above 1083.50 in the March S&P futures might be what it takes to shake out the shorts. 

The Institute of Supply Management’s manufacturing index was reported at its best performance in five years.  The news put a positive tilt on trade but the rest of the day’s data wasn’t quite as promising.  According to the Commerce Department, construction spending fell in December much more than expected and personal spending increased at a slower than anticipated rate. 

Thus far, the earnings season has been a relative success.  Of all of the numbers that have been released, the overall performance has been 17% higher than analyst expectations.  Ironically, the S&P is coming off its worst month in over a year.  As we noted prior to the earnings season, it can be difficult to please a lofty market and that is exactly what we are seeing unfold. 

The overnight low in the S&P was 1068 (a bit higher than our 1061 support) but perhaps close enough to justify being temporarily bullish.  We aren’t necessarily bullish…but we do think that this “bounce” could see prices in the 1120 range. 

The NASDAQ on the other hand, has been the weakest of the indices and will need to break, and hold above, 1770 tomorrow if the markets are going to move higher in the next few sessions.  If this happens, the March NASDAQ futures could see 1835ish.  Look for a possible bounce in the Russell to 627. 

* 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 -

January 21 – Our clients were advised to sell the March S&P 1000 puts today following the drop in an attempt to capture the market volatility in the put premium.  Fills were coming in from $8 to $9. 

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 -

January 27 – Buy 1 e-mini NASDAQ near 1781

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.DeCarleyTrading.com

www.CommodityOptionstheBook.com

*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.

January 27th, 2010

Carley’s new book, “A Trader’s First Book on Commodities” is now available at all major book outlets!

No surprises with Fed Funds policy

As expected, the Federal Open Market Committee voted to leave overnight interest rates unchanged at approximately 0%.  In addition, the Fed didn’t throw any curve balls in regards to peripheral policies and programs.  They confirmed that the Mortgage Backed Securities purchases would expire at the end of March and reminded the markets that the infamous TALF will soon come to an end.  Last but not least, they continue to pledge that interest rates will remain low for an “extended period”.  That said, at least one member (Hoenig) was against keeping the “extended period” statement. 

All in all, the Fed offered a positive outlook on the health of the economy.  They note that the economy continues to “strengthen” and deterioration of the labor market is “abating”.  They also note that inflation is likely to be “subdued for some time”. 

Shares of Apple lifted the NASDAQ higher after CEO Steve Jobs introduced the new iPad.  At $499 it was created to compete with Kindle and according to the tech giant is more “intimate” than a laptop. 

The major indices have been beaten down in recent days, but what goes up must come down and vice versa.  Assuming that the State of the Union Address doesn’t give the market a dose of reality, we are looking for an eventual bounce from current or moderately lower levels. 

1077 marks critical support in the March S&P futures, with the next significant area at 1061.  However, for now we believe that the mid-to-high 70’s will hold.  Resistance will be found at 1100 but we think that the upswing will eventually see the low 1120’s. 

Similarly, the Russell appears to be holding our 608ish support and could be headed higher.  We see resistance near 628.  The NASDAQ could see the 1855ish area on a short covering rally.

* 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 -

January 21 – Our clients were advised to sell the March S&P 1000 puts today following the drop in an attempt to capture the market volatility in the put premium.  Fills were coming in from $8 to $9. 

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 -

January 27 – Buy 1 e-mini NASDAQ near 1781

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.DeCarleyTrading.com

www.CommodityOptionstheBook.com

*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.

January 20th, 2009

Register for Carley’s online class through the New York Institute of Finance discussing option selling at www.DeCarleyTrading.com!!

Market gets what it wants but isn’t happy

A frothy market can be hard to please, especially during earnings season.  Stocks rallied yesterday on hopes of a Republican victory in the Massachusetts senate race (which is interpreted as gridlock on tax hikes and the healthcare bill).  A Republican took the state’s seat for the first time since the early 1970’s but that wasn’t enough to overcome fresh concerns over tightened lending standards in China.  

Last week, news of Chinese monetary policy aimed at cooling down an overheated recovery sent the market swooning.  The latest move to prevent “speculative bubbles” in China is increased monitoring of banks.  Investors worry that such efforts will hinder the global economy.  Also adding pressure share prices, earnings from industry bellwethers such as IBM and Morgan Stanley were on the disappointing side. 

We still like selling rallies in this market, but the recent action has left our technical models with mixed signals….not to mention we have been unable to successfully execute the short call option recommendations made to clients.  Nonetheless, missing trades is part of the game…if it were easy, we would all get bored! 

We are hoping for a run to 1155 area in the S&P, but whether or not we see it will depend on earnings and tomorrows numbers.  Should this price be seen, we will likely be shopping for bearish option trades.

* 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 -

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 -

December 28 – Sell 1 mini NASDAQ near 1879

• Hopefully you are out of this, in the newsletter dated 1-15 (emailed intraday) we recommended getting out near 1853. If not, you might have to ride the market back up before more selling comes in.

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.DeCarleyTrading.com

www.CommodityOptionstheBook.com

*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.

January 12th, 2009

Register for Carley’s online class through the New York Institute of Finance discussing option selling at www.DeCarleyTrading.com!!

Earnings woes weigh on market

Six consecutive days of equity gains weren’t meant to be seven (keep in mind that the market has never had 9 consecutive up days in a row).  Traders were looking for a reason to roll the market over, and Alcoa seemed like the perfect opportunity. 

The aluminum giant missed earnings estimates despite beating revenue forecasts.  They also posted a much narrower loss for the quarter than was reported last year during the same time.  All in all, I think that it is fair to say that the news wasn’t fundamentally disastrous but it seemed to carry a psychological wallop. 

Technology acted as a weight around the neck of the broad market.  The March NASDAQ futures traded much weaker, in regards to percentage loss, relative to the S&P and the Russell.  Given that tech was a market leader on the way up, this could be a sign of more underlying weakness to come. 

As we had been predicting in previous newsletters, the S&P ran into trouble in the mid-to-high 1140’s, 1900ish acted as a ceiling for the NASDAQ and the Russell held our 649 resistance area.  If this information could have helped you with your trading, and you aren’t already trading with us…maybe you should give it some thought.  Our clients receive this newsletter daily along with intraday commentary (an guidance depending on the service level chosen).   We offer services ranging from broker assisted to discount online and would be happy to work with you to find an arrangement that is comfortable.

What happens from here will depend on earnings but we tend to think that the overall direction will be lower.  The first downside target will be 1120 in the S&P and if things weaken from there we will be looking for 1090. 

* 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 -

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 -

December 28 – Sell 1 mini NASDAQ near 1879

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.DeCarleyTrading.com

www.CommodityOptionstheBook.com

*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.

January 8th, 2009

We’ve remodeled, check out www.CommodityOptionstheBook.com !

Jobs numbers a minor miss

Equities traded relatively mixed following a moderate miss on the non-farm payrolls numbers.  Despite the slightly bearish news, it seems as though the painfully slow short squeeze is still in full effect.  In the midst of the melt-up, the CBOE’s volatility index, the VIX, has dropped to 18 and is now in territory not seen since October 2008…just before the “end of the world” as we knew it. 

Some smart traders struggled in 2009 trying to call a high to the “bear market bounce” in equities but it seems as though, if there are any bears left they might finally get their payday.  It is impossible to predict just how high the current rally will take the major indices, but we have a feeling we are nearing an end…at least for now.  Along with seasonal reversals looming, the low volatility is likely just the calm before the storm.  A low (oversold) VIX can often signal a down turn in equities is imminent. 

It looks like the market will be searching for buy stops on Monday morning (mutual fund Monday), accordingly we estimate that the mid-to-high 1140’s (or even 1150) could be seen.  That said, we doubt that prices will be able to sustain themselves at these levels in the near term. 

If you are trading the NASDAQ, we still think that 1900ish will be a ceiling for now.  The Russell on the other hand could see as high as 649 but we would be bears at such levels. 

* 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 -

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 -

December 28 – Sell 1 mini NASDAQ near 1879

Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.DeCarleyTrading.com

www.CommodityOptionstheBook.com

*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.