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The Dow Futures Report

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US Equities higher on better than expected pending home sales

Wed, Jun 3 2009, 07:52 GMT
by Paul Brittain

US EQUITIES HIGHER ON BETTER THAN EXPECTED PENDING HOME SALES. GAINS MUTED AHEAD OF WEEKLY EMPLOYMENT DATA.

US equities posted slight gains on Tuesday, bolstered by a strong than expected reading on pending home sales data which offered some additional positive sentiment that the recent gains in equities may continue further than many expected. Financial shares were mixed as a number of the largest financial institutions continue their efforts to raise capital to meet the required stress test levels imposed by US auditors in May. Additional signs of market stabilization appeared today as the VIX (volatility index) level fell back below the psychologically important 30 level.

Homebuilders, technology, and consumer stocks support the markets eventual bullish outcome today. It is not surprising that gains were muted today as the lagging indicator of employment data appears for consideration this week. Positive sentiment appears to be on the horizon as acceptance of the gloomy employment picture is being considered and inevitability and should remain so while the data moves along its timeline to the psychologically important level of 10% unemployment in the US.

Technically, June Dow futures are skirting near overbought territory based on daily and 60 minute RSI. Based on the ranges and the chart progression, the market should expect to set up with a series of higher lows for the near term. Look for a possible pullback to 8560 sometime within this week. Longer term support sets up at 8460. Resistance sets up at 8870.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8690	8770	8670	8714	26
SPM9 (JUNE S&P)	939.9	948.5	937	942.6	3.5
NDM9 (JUNE NASDAQ)	1469	1495	1466	1478.5	8.50

Published on Wed, Jun 3 2009, 07:52 GMT

Sustainability of funding for economic recovery comes into question

Thu, May 28 2009, 06:04 GMT
by Paul Brittain

Alaron

EQUITIES FALL, TAKING CUE FROM BONDS, AS SUSTAINABILITY OF FUNDING FOR ECONOMIC RECOVERY COMES INTO QUESTION.

US EQUITIES returned a significant portion of Tuesday’s gains after concerns regarding the seemingly unstoppable rise in US government bond yields spurred a move away from riskier assets. The market expressed concern that the economic recovery could stall as businesses and consumers could face higher borrowing costs. The seemingly unending supply of government debt coming onto the market place spooked investors, despite the positive reception of Tuesday’s and Wednesday’s Treasury auctions and a near record jump in consumer confidence. Like most commodities though, in the end it essentially boils down to the notion of supply and demand. The market appeared to be looking ahead and noted a point in the future where inflation and the lure of higher yielding alternative investments will overcome the government’s ability to support a low lending rate environment.

The decline was broad based with manufacturing, retail, and technology stocks falling on fears that the thaw in the credit freeze may slow as rates increase. Trading was relatively light. General Motors also weighted heavily on equity sentiment, despite its near nonexistence market cap. The “carmaker?” failed to reach an agreement with its bondholders, suggesting that declaration of bankruptcy is only days away. Equity markets are likely to enter a period of uncertainty this week as concerns regarding the employment picture will take center stage again when the government reports on May unemployment figures and nonfarm payrolls.

Technically, June Dow Futures continue to range trade, closing slightly above a key support of 8260. The market continues to range trade without much clear direction. A break through support should set up a test of the 8090 level. Market is offering conflicting signals, as slightly higher lows compete with a pattern development that offers more support levels on the downside to retrace to before trying to renew a longer term bull market. Resistance for the contract sets up at 8575.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8470	8480	8275	8297	-164
SPM9 (JUNE S&P)	909.2	912.7	890.5	892.5	-16.2
NDM9 (JUNE NASDAQ)	1408	1429	1397	1404	-6.75

Published on Thu, May 28 2009, 06:04 GMT

US Stocks rally as consumers sense recession may be bottoming

Wed, May 27 2009, 06:17 GMT
by Paul Brittain

Alaron

US STOCKS RALLY AS CONSUMERS SENSE RECESSION MAY BE BOTTOMING, TECHNOLOGY, CONSUMER SECTORS LEAD BROAD BASED GAINS.

US EQUITIES rallied back from the long opening weekend of summer. Initial pressures from escalating geo-political tensions and falling home prices fell to the wayside after a report on US Consumer Confidence showed the largest gain in nearly 6 years. Underlying forces, such as continued support from a record low LIBOR rate, worked in congress with the increased positive sentiment to spur a sustained rally in equities. Gains were led by the technology sector with Apple gaining nearly 7 % on the day after an upgrade from Morgan Stanley based on perceived double digit growth for the company’s I Phone and other electronics. Consumer discretionary stocks also gained as the positive sentiment numbers offered hope that a foreseeable end to the global pullback in spending may be on the horizon.

Financials gained, although they needed to overcome early pressure set up by a pre market report showing that home prices continued to fall at a record pace for the first quarter of 2009. There were some positive signs from this number as latter readings in the quarter showed the falling pace slowing somewhat. General Motors continues its wild spiral (or death roll) as its stock fluctuated violently as the countdown for acceptance of a tender offer by its bondholders appears likely to fail.

Overall, expectations for the equities this week should remain volatile, with today’s gains from consumer sentiment being challenged by notions that the positive outlook may not translate into direct private spending in the near term, particularly as US employment figures offer a sobering reminder of the longer term difficulties ahead as the unemployment levels continue to march toward 10%.

Technically, June Dow Futures continue to ricochet between support and resistance levels. The move higher today sets up a level of support at 8260. The market would need a sustained close below this level to confirm a possible setup for downward momentum. A resistance target of 8578 sets up on the chart, with a break of this level setting up a test of 8710.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8210	8480	8205	8461	201
SPM9 (JUNE S&P)	878.8	910.9	878.5	908.7	23.8
NDM9 (JUNE NASDAQ)	1346.5	1415	1346.5	1410.75	50

Published on Wed, May 27 2009, 06:17 GMT

US Stocks fall

Fri, May 22 2009, 06:52 GMT
by Paul Brittain

Alaron

US STOCKS FALL. VOLATILITY INCREASES ON FOMC MEETING, UK CREDIT RATING CONCERNS.

US EQUITIES fell on Thursday, continuing to feel the pressure from growing concerns regarding US budget deficits and credit worthiness and stability of government securities. These concerns fueled a dramatic sell off in dollar denominated assets and prompted investors to hedge portfolios with alternate asset classes such as gold and silver. Pre summer holiday volatility was high as equities as well as debt markets came under sever selling pressure due to the loss of the United Kingdom’s AAA credit rating by S&P. Fears grew that the United States, currently traveling the same path of a near 100% ratio of debt to GDP (Gross National Product) could be next in line for a similar downgrade.

Manufacturing and technology stocks were among the worst performers today, as positive sentiment in these sectors collapsed due to perceptions that economic recovery will likely take longer than expected and contributions to the delay are being fostered by the actions being taken to try and repair the credit damage (double edged sword). In addition ongoing unemployment claims continue at a record pace and a reading on manufacturing from the Philadelphia Fed Survey came in worse than expected. Trading volume was light, with the negative sentiment failing to support a clear trend. Equity markets recovered from their lows toward the end of the session, closing slightly off of the opening range.

Technically, June Dow Futures are testing the downside of the recent channel, with a break of 8215 signifying increased building of strength in downward momentum. Market will have to challenge key levels of support at 8169 and 8077. Resistance has set up at 8454.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8305	8310	8209	8295	-100
SPM9 (JUNE S&P)	889.8	893.1	878	888.7	-11.2
NDM9 (JUNE NASDAQ)	1381.5	1390	1352	1367.5	-25

Published on Fri, May 22 2009, 06:52 GMT

US Stocks retreat from early gains

Thu, May 21 2009, 06:39 GMT
by Paul Brittain

Alaron

US STOCKS RETREAT FROM EARLY GAINS. FINANCIALS TURN SOUTH ON PROFIT TAKING, FOMC MINUTES

US EQUITIES suffered a late day selloff on Wednesday after the release of the US FOMC (Federal Open Market Committee) minutes communicated a downward revision to growth figures, fueling speculation that the current recession is likely to drag on well into 2010. Sentiment in the financial sector turned negative as ongoing progress of the US bill to overhaul credit card terms overcame the early rally fueled by the well received stock issue offering by Bank of America. Overall BOA rise was seen as somewhat of an anomaly compared to the tentative gains achieved by other banking institutions. New levels of volatility entered the sector as individual positions regarding the payback of TARP funds have been established in the last few sessions.

The pullback in financials won out over another day of strong gains in the energy and material sectors. Both were fueled by a weakening US Dollar, which often boosts commodity prices, and the weekly EIA inventory reports for crude oil. The report showed that crude oil and RBOB gasoline both experienced stronger than expected drawdown in supplies ahead of the long Memorial Day weekend- the unofficial start of the summer travel season. At these levels, it appears that higher energy prices are offering support to the equity markets (remember when they were enemies?). Perhaps the higher energy prices are being supported for the time being by the powers that be in order to spur buying interest in cash rich sectors that could reopen the notion of investing rather than trading. But since trading is the nature of the business here, the key is to find the elements that create support, resistance and price movement. Technology stocks ended mixed as computer makers came under pressure from disappointing earnings from Hewlett Packard. However Analog Devices posted better than expected earnings, lending support to the chip sector. Volume again was low, alluding to the beginning of the summer doldrums.

Technically, June Dow Futures will again be hard to measure due to the low volume. Near term support sets up at 8287. Resistance for the channel sets up at 8553. Any potential breakout movements will need to be measured against volume to determine a viable contribution to trend action.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8515	8572	8390	8395	-54
SPM9 (JUNE S&P)	915	923.2	899.5	899.9	-6.6
NDM9 (JUNE NASDAQ)	1401.5	1423	1387	1392.5	-1.5

Published on Thu, May 21 2009, 06:39 GMT

US Stocks put poor housing data in perspective

Wed, May 20 2009, 07:38 GMT
by Paul Brittain

Alaron

US STOCKS PUT POOR HOUSING DATA IN PERSPECTIVE, MARKET HOLDS ONTO MONDAY’S GAINS AS VIX READING DROPS TO LOWEST LEVEL IN EIGHT MONTHS.

US EQUITIES posted a relatively neutral session on Tuesday, as commodity and technology stocks continued to climb amid further signs of improvement in financial and economic conditions. The VIX (US volatility indicator) fell below the 30 level for the first time since the collapse of Lehman Brothers, the event considered to be the “Pearl Harbor” of the financial meltdown. The sense of growing confidence in taking risk managed to weather a surprisingly poor reading on the number of new housing starts in the United States. The month over month drop of 13% (480K vs. 540K exp) could have been the exact catalyst which may have tanked the markets in previous periods of investor tension. However despite the reality check offered by this sobering number, the markets seemed to make “lemonade out of lemons” with regards to the interpretation of these numbers, as the majority of the drop off was in multifamily units. Single family dwellings performed far better. The markets also seemed to interpret these figures as the application of fiscal responsibility, as the focus of drawing down existing inventory should demonstrate the commitment to finding a bottoming range within the overblown housing sector.

Drops in volatility worked hand in hand with continued pullbacks in the LIBOR rate- a key measure of credit liquidity and perceived risk, to promote support for higher risk/ higher yielding investments. Measures of the costs of protecting corporate bonds continue to decline as many of the leading US financial institutions are positioning to payback government bailout money. Technologies gained as the markets expected strong numbers for Hewlett Packard after the market closed. The numbers did disappoint though and commercial real estate readings continue to show weakness.

Technically, June Dow futures offer little signs of a breakout. Support should set up at 8366 on pullbacks this week. Resistance should be found at 8520.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8475	8515	8445	8449	-21
SPM9 (JUNE S&P)	907	914.9	903.7	906.5	-0.6
NDM9 (JUNE NASDAQ)	1386	1411	1379.5	1394	5.5

Published on Wed, May 20 2009, 07:38 GMT

US Stocks Start The Summer Party Early

Tue, May 19 2009, 04:42 GMT
by Paul Brittain

Alaron

US STOCKS START THE SUMMER PARTY EARLY. EQUITIES REBOUND FROM LAST WEEK’S FALL LED BY ENERGIES, FINANCIALS, HOME BUILDERS.

US EQUITIES rebounded in an early start to summer on Monday after last week’s near 5 % drop, as confidence grew in key lynchpins sectors of economic recovery. The housing sector received a double barrel of support today as Lowes, the second largest US home improvement retailer, beat analyst’s profit expectations. In addition, a report on US homebuilder sentiment came in at that strongest level since September of 2008. Rising consumer confidence and housing turnover offered a significant boost to housing sector stocks.

Financials rebounded after Goldman Sachs upgraded Bank of America stock to a “conviction buy” The financial sector gained as buyers took an optimistic view on banks progress in raising capital and mortgage creation/refinancing. Many analysts feel that the market is absorbing the new issues of equity well and that this could lead to a number of financial institutions being able to repay TARP funds effectively.

Energy shares followed in the wake of strong economic sentiment after crude oil closed at its highest levels since November, driven up by fundamental concerns and pre Memorial Day positioning. Material stocks also gained as copper prices moved up nearly 5 cents, recovering from last week’s pullback.

Technically, June Dow futures should be coming under the influence of increased price volatility. Resistance should form at 8517, while support within this near term channel forms at 8263.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8330	8485	8325	8470	203
SPM9 (JUNE S&P)	891	908.5	889	907.1	24.1
NDM9 (JUNE NASDAQ)	1364	1393	1356	1388.5	34.25

Published on Tue, May 19 2009, 04:42 GMT

US EQUITIES rally back from key support levels

Fri, May 15 2009, 06:07 GMT
by Paul Brittain

Alaron

US STOCKS PULL OUT OF WEDNESDAY’S DIVE AS BUYERS TAKE ADVANTAGE OF BARGAINS IN TECHNOLOGY, FINANCIAL SECTORS.

US EQUITIES rally back from key support levels as buyers took advantage of the four day losing streak in the NASDAQ to purchase technology stocks at perceived bargain prices. The positive sentiment that began in the tech sector offered recovery support to the major indices. In addition, equity buyers took a cautiously optimistic view on the financial sector as the Libor rate, the rate banks charge each other to lend out funds, staged its biggest drop in two months to a record low of 0.85 percent.

Stocks initially retreated to key levels of support after US weekly jobless claims came in lower than expected. The report was expected to reinitiate the negative sentiment which gripped the equity markets on Wednesday after US retail sales staged consecutive monthly drops. The markets shrugged off the poor employment outlook after better than expected earnings from CW systems, the world’s second largest software developer, reported better than expected earnings. This triggered short covering and bargain hunting in the technology sector, which has been subject to strong profit taking since late last week. General Motors continued its downward spiral, dropping 5% after a chief executive of the company reported that bankruptcy was “probable.” Ford shares swung the other way after its chief executive reported that the automaker the company was making “significant progress” on restructuring its balance sheet. The company succeeded in raising about $1.6 billion on Wednesday through a new stock offering. Equities appear likely to have more downside to test in the wake of the strong run up from the 830.00 level in the S&P and 7770 level in the Dow.

Technically, June Dow Futures appear likely to test support at 8220. A break of this could set the market up for a test of significant support at 8096. Renewal of upward momentum should set up target at 8420, with 8590 a key breakout level to the upside.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8265	8350	8250	8287	-7
SPM9 (JUNE S&P)	883.2	896.5	880.2	889.5	4.2
NDM9 (JUNE NASDAQ)	1344.5	1370	1343.5	1353.75	9.5

Published on Fri, May 15 2009, 06:07 GMT

US stocks head for the exits

Thu, May 14 2009, 06:12 GMT
by Paul Brittain

Alaron

US STOCKS HEAD FOR THE EXITS, FEW PARACHUTES AS WEAK RETAIL DATA REIGNITES RECESSION CONCERNS.

US EQUITIES fell on Wednesday after US retail sales posted consecutive monthly losses, offering an opposing view to the positive data that supported notions of economic recovery as consumers expressed their fears regarding the lagging indicator of employment by holding back significantly on purchases outside of necessities. The scope of the concern was made evident by the fact that the drop in April retail sales was higher on the core measure that excludes the high publicized automobile industry. Speaking of those Titans of capitalism (As I recall, the Titans lost and were confined to the center of the earth), negative equity sentiment was further “fueled” by General Motors and Chrysler announcing today that they would be closing 3000 dealerships in the United States. The dealerships would be primarily in urban areas, offering even greater challenges for municipalities with ever dwindling tax bases and vacant commercial real estate.

Retail stocks fell despite better than expected results from several large consumer product companies after the retail sales data was released. Financial and Technology stocks continued to struggle in the wake of continued new issues of stock in an effort to raise capital outside government and public sectors.
Financials also fell as mortgage applications fell in the wake of higher interest rates for the first week of May. Drug stocks continued to buck the pullback in equities, as buyers took positions in defensive sectors. Realizations that the recession is still offering challenges and that certain elements of the global economic slowdown (employment for example) have not bottomed out yet.

Technically, June Dow Futures retraced through support of 8275 before closing slightly above this level. The market should continue to test support level, making an attempt to correct to 8228. Significant support remains in place at 8126.
Upward recovery in the market should be capped out at 8420 for the near term.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8320	8332	8235	8294	-142
SPM9 (JUNE S&P)	892.3	895.3	880	885.3	-21.5
NDM9 (JUNE NASDAQ)	1366	1366	1338	1344.25	-40.75

Published on Thu, May 14 2009, 06:12 GMT

US stocks fall for second session

Wed, May 13 2009, 06:05 GMT
by Paul Brittain

Alaron

US STOCKS FALL FOR SECOND SESSION, RECOVER FROM LOWS AS PROFIT TAKING CONTINUES IN FINANCIAL, TECHNOLOGY SECTORS.

US EQUITIES fell for a second day, but closed well off the lows of the session, as continued profit taking in financials and technologies, spurred by concerns regarding dilution of shares through new equity issues, managed to overcome gains in the energy and mining sectors after crude oil traded above $60.00 and commodity prices rallied on a weaker US Dollar and improving economic sentiment.

Equity investors continue to reassess their risk tolerance as the economic outlook is entering a period of relative uncertainty. The surprisingly positive earnings season has essentially passed and the next categories likely to capture investor sentiment will be inflation concerns and the sustainability of global recovery beyond the days when government s offer unprecedented levels of stimulus. This is not to say that a negative outcome for this period is inevitable.
The suggestion here is merely that clear economic pictures in this dynamic environment are fleeting at best. It remains a traders rather than an investors market on the surface for the near term. Patterns do appear to be forming that could lead to a rebuilding of sustainable trends and manageable volatility.

Healthcare, mining, and energy stocks were among the best performing sectors today and managed to lift the major indices off of their worst levels of the day.
Additional support for equities came from comments by former Fed Chairman Alan Greenspan. Mr. Greenspan stated in his testimony that he sees the bottoming of the housing market as “very close” and recession challenges being aggressively met. Of the major indices, the Dow was the only one to close in positive territory, helped by those increases in defensive and blue chip stocks.
Pfizer, Coca Cola, and Philip Morris were among the best performers.

Technically, June Dow Futures were somewhat out of line with the other major indices due to strong performance by several of the key stocks within the index.
The contract continues to skirt near daily overbought indicators. Continued of the pullback that began on Monday should find initial support at 8275, with a stronger level of support setting up at 8126. Upward resistance target sets up at 8554.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8430	8475	8328	8436	+34
SPM9 (JUNE S&P)	911.70	913.50	894.10	906.80	-2.20
NDM9 (JUNE NASDAQ)	1398.00	1399.50	1360.00	1385.00	-11.75

Published on Wed, May 13 2009, 06:05 GMT

Technology stocks gain on positive outlook for servers

Tue, May 12 2009, 05:49 GMT
by Paul Brittain

Alaron

US EQUITIES STAGE PULLBACK AS BUYERS STAGE PROFIT TAKING IN FINANCIAL SECTOR. TECHNOLOGY STOCKS GAIN ON POSITIVE OUTLOOK FOR SERVERS, EXPECTATION ON MICROSOFT DEBT OFFERING.

US EQUITIES staged a broad based pullback, with only elements of the technology sector finding support, as broad consolidation took place across the equity, financial, and commodity sectors. The wave of profit taking was fueled by a sense of overindulgent optimism regarding prospects for global economic recovery. Most analysts felt that Monday’s pullback was to be expected in the wake of recent run ups which powered the financial, energy and material sectors to near seven month highs. Sentiment remains that for the near to midterm, the support offered by the unprecedented levels of capital being flooded into the credit markets and economic systems of the world, will likely keep the markets from undertaking another massive freeze up of credit that would fuel economic stagnation.

General appetite of risk staged a strong pullback today, as equities and commodities fell, while Treasuries and risk hedging currencies such as the low yielding US Dollar and Japanese gained. Global data was mixed as recovery comments from the ECB (European Central Bank) and China’s central bank were countered by reports of Toyota’s poor sales numbers and worse than expected readings on French and Italian industrial output. A lack of fresh US economic data also helped to spur Monday’s profit taking. Expectations are for a possible upside move in the markets based on data releases later this week that should offer further glimpses into consumer activity (US Retail Sales) as well as possible upticks in inflation (PPI and CPI)

Financials, Energies, and Materials stocks led the markets lower. One sector which bucked the pullback trend was the technology sector. Besides the fact that technologies had already seen a wave of profit taking in the previous week, the sector benefited from positive analyst comments on SAP and Oracle as well as excitement generated as Microsoft announced plans for its 1st debt offering in order to raise capital.

Technically, June Dow futures remain near overbought conditions. Market should likely pullback to an initial support level of 8310, with 8145 setting up as a key support level. A renewal of upward momentum could see the futures move back toward 8504, with a key resistance target of 8608.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8430	8448	8370	8402	-114
SPM9 (JUNE S&P)	912	916	905.9	909	-15.7
NDM9 (JUNE NASDAQ)	1371	1411	1368	1396.75	7.25

Published on Tue, May 12 2009, 05:49 GMT

US Equities experience a stally in the rally

Fri, May 8 2009, 06:02 GMT
by Paul Brittain

Alaron

US EQUITIES EXPERIENCE A STALLY IN THE RALLY AS TECH STOCKS LEAD SWEEPING PROFIT TAKING ACTION.

US EQUITIES experienced “vapor lock” and stalled in today’s rally as profit taking in technology stocks spread across all of the major market sectors. Considering the recent run up in the markets and the “buy the rumor, sell the fact” psychology which has prevailed during so many recent equity rallies, it is not surprising that the markets sold off today.

The fall came in spite of another round of economic data showing that the global economic recession may be bottoming. The ECB (European Central Bank) cut interest rates to a record low and announced plans to enact a quantitative easing program through the purchase of $80 billion worth of Euro Zone bonds. The Bank of England also announced additional commitments to its economic stimulus programs. In addition, US weekly unemployment claims came in lower by nearly 7000. All of this data helped push the major indices to new highs for the year in the pre market sessions.

As the US markets opened, technology stocks, which led the major indices higher due to the strong cash positions of underlying companies, began to see waves of profit taking after analysts downgraded a number of telephone and communication companies. With pressure from technologies and stress test results looming, it was not surprising that the markets fell to test recent support levels (912.00 in the S&P). Once this level was significantly breeched, downward momentum began as stops were hit and profit taking began. In the aftermarket, financials regained some ground after the government announced that 10 banks would need to raise $74 billion of new capital. The market appeared to find some support it what could be considered a relatively low number.

Expect the overnight to be relatively quiet ahead of Friday’s release of US employment numbers. The main speculation will be if the surprisingly soft ADP numbers will carry through to the broader reading on US employment.

Technically, June Dow Futures hit resistance at the 8510 level before retreating to 8387 settlement. The market’s upward target level remains at todays high of 8540. A break of this level should have the market top out in the near term at 8592.
Support should be found at 8280, with a break of this level allowing for a test of 8208.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8540	8540	8315	8387	-84
SPM9 (JUNE S&P)	925.50	926.70	898.20	907.00	-10.20
NDM9 (JUNE NASDAQ)	1431.00	1431.50	1375.00	1394.50	-35.25

Published on Fri, May 8 2009, 06:02 GMT

Financials and energies lead rally

Thu, May 7 2009, 05:51 GMT
by Paul Brittain

Alaron

US EQUITIES RALLY ON BETTER THAN EXPECTED ADP EMPLOYMENT REPORT, PERCEPTION THAT STRESS TESTS WILL BE WELL TOLERATED BY BANKS. FINANCIALS AND ENERGIES LEAD RALLY.

US EQUITIES rose to their highest levels of 2009, with the major market indices erasing losses for the year, as equity buyers maintained the week’s buoyant mood supported by a surprisingly soft report on the loss of jobs in the United States. The ADP Employment report, a measure of US private sector jobs, showed a loss of 491,000 jobs (March figures were also revised down to 702 K from near 740K). Expectations had been for another reading of over 700,000. The lower number joined recent US indicators in the housing and industrial sectors in supporting the notion that the global recession may be reaching a bottom and that the unprecedented levels of capital being hurled at the markets may be finding some footholds to begin the process of reinvigorating the global economy.

The ADP number supported additional gains in financials, as evidenced by the sector posting some of the strongest gains today, as a number of reports suggested that many of the financial institutions had fared well in the government stress tests scheduled to be released on Friday. Citigroup, Wells Fargo, and Bank of America all posted double digit gains after announcing their expected capital needs. Bank of America was dragged up in sympathy with the sector, posting a nearly 15% gain despite a report stating that the government has asked the bank to come up with $34 billion in new capital (triple the amount expected).
Overall, the sector seems poised to have lower capital additions that previously thought.

Energy companies were the second best performing equity sector today, after crude oil prices rose to 5 month high spurred by a bullish inventory report and positive recovery sentiment. Home builders were the weakest performers today after negative earnings and a report stating that nearly a quarter of US homeowners owe more than their properties are worth.

Technically, June Dow futures continue higher toward a resistance target of 8514. As one can imagine, the market appears to be getting near an overbought range and should undertake a pullback to fill in a range gap back to 8319. Key level of support for June Dow futures sets in at 8066.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8460	8480	8370	8471	89
SPM9 (JUNE S&P)	912	918	901.3	917.2	13.2
NDM9 (JUNE NASDAQ)	1434	1435	1399	1429.75	2.5

Published on Thu, May 7 2009, 05:51 GMT

US Equities tred a cautious session, profilt taking ahead

Wed, May 6 2009, 05:46 GMT
by Paul Brittain

Alaron

US EQUITIES TRED A CAUTIOUS PATH AHEAD OF EMPLOYMENT DATA. MARKETMAINTAINS BULLISH TONE AS IT CLOSES AT TOP OF RANGE IN SPITE OFHEADWINDS. DATA OFFERS SOME SUPPORT.

US EQUITIES staged what be considered a successful defense of Monday’s gains after comments from Fed Chairman Bernanke, a better than expected reading on the service sector, and continued positive sentiment regarding the financial sector’s ability to raise capital limited the markets pullback to a profit taking function rather than a resumption of the “sell the rumor, buy the fact” strategy which has occurred during employment data weeks for the last year. The market appears to be discounting the initial effect of the employment indicators, as expectations are for the US unemployment rate to challenge the level of 10% before finding any ability to recover, as employment is considered to be one of the last indicators to show signs of the developing economic trend.

Despite the relatively subdued pullback, most of the major sectors offered pullbacks from Monday’s gains. Financials posted a mixed picture as banks that already have capital increases priced into their shares (BOA, Citigroup) rose while the uncertainty of their position weighed on shares of Wells Fargo and JP Morgan Chase.

Energy and material stocks pulled back from yesterday’s gains after crude oil fell from a 5 month high and steel companies took a hit from expectations of continued earnings challenges in the wake of the slowdown in the auto industry-one of its largest customers. Overall though, most analysts determined that the overall mild pullback and strong close represented sustained positive sentiment for equities.

Technically, June Dow futures continue to remove higher, with resistance setting up at 8449. Upward target for the market should be 8579. Support for a retracement move should be at 8230, with a key breakdown level at 8080.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8360	8405	8310	8382	23
SPM9 (JUNE S&P)	901.00	904.60	893.80	903.40	0.60
NDM9 (JUNE NASDAQ)	1421.00	1428.00	1406.00	1427.25	4.75

Published on Wed, May 6 2009, 05:46 GMT

US Equities trade to 2009 highs

Tue, May 5 2009, 05:50 GMT
by Paul Brittain

Alaron

US EQUITIES TRADE TO 2009 HIGHS, S&P 500 CLOSES ABOVE 900, AS MARKETS TAKE HEAT FROM POSITIVE OUTLOOK FOR HOUSING, BANK CAPITAL CONCERNS SIDELINED.

US EQUITIES staged broad based leaps across nearly all market sectors as a better than expected read on US pending home sales and construction spending offered additional hope that the US recession may be finding a bottom. All of the major market indices closed at levels which put them in positive territory for 2009, with the S&P 500 closing above the psychologically significant 900 level for the first time since December of 2009.

Stocks came into the US open with somewhat of a positive feel after reports of better than expected results from China’s PMI (Purchasing Managers Index) and European sentiment increased after Fiat announced it was in negotiations to purchase General Motors European car and Truck divisions. The sense of recovery was kicked into overdrive after US reports on construction spending and pending home sales came in far better than expected. The construction spending figures were of particular significance as expectations were for a decline and the increase mirrors China’s efforts for recovery.

The market rally was broad based, with financial, energy, and technology stocks taking the lead once again. The tech sector received an early boost after Sprint Nextel reported better than expected earnings. Energy and material stocks posted strong gains after crude oil prices rose to their highest levels in nearly six months on speculation that the economic recovery may lead to increased demand for crude worldwide. A fall in the value of the low yielding US Dollar also supported commodity price gains and the appeal of underlying stocks.

Financial stocks gained on speculation that the likely increases to capital reserves call for by the US government’s stress tests will be manageable.
Expectations are that the release of the data will show that the financial institutions that fail to make the grade will be able to make of the shortfalls through private capital offering and not by requesting additional funds from the Federal Government. Bank of America and Citigroup were among the sectors strongest gainers. The sustainability of these gains in the near term may be in question as the markets will be contending with the lagging sentiment of employment later in the week. The focus to this last piece of the economic pie should offer some sobering element to equity traders, particularly as the realization hits the marketplace that a number of higher paying positions have been essentially lost forever.

Technically, June Dow futures broke through and closed through significant resistance at 8260. The strength of this move remains significant as the break could set the market up for a longer term move back toward the 8880 level. Daily and 60 minute RSI indicators do offer signs that the market is reaching overbought territory. Support for a recovery downward move has setup at 8080, with 7975 setting in as a key support based on a 50% Fibonacci retracement figure.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8225	8380	8210	8359	178
SPM9 (JUNE S&P)	881.00	904.50	879.20	902.80	26.70
NDM9 (JUNE NASDAQ)	1408.00	1425.50	1402.00	1422.50	24.00

Published on Tue, May 5 2009, 05:50 GMT

US Equity post FOMC rally stalls on disappointing profits from EXXON mobil

Fri, May 1 2009, 06:11 GMT
by Paul Brittain

Alaron

US EQUITY POST FOMC RALLY STALLS ON DISAPPOITING PROFITS FROM EXXON MOBIL, SENTIMENT OVER CHRYSLER BANKRUPTCY.

US EQUITIES ended a volatile session flat to slightly higher as the technology sector, with its cash rich position, posted the highest gains of the session as financials, consumer, and material stocks retreated after touching technical resistance levels overnight. Positive sentiment over the near 10 to 1 ratio of outperforming to underperforming earnings reports received a reality check after Exxon Mobil posted a lower than expected earnings and Chrysler Motors brought speculation into reality as the automakers declared bankruptcy and moved forward with its planned merger of support with Fiat Motors. The action by Chrysler (with just a little support from the US Government) offered a reminder of the significant economic problems which still exist and require time and pain to work through. The government also struck a blow to the financial sector through its criticism of the inability of financial institutions and hedge funds to police the abuses of debt offered to the automakers as well as the inability of the parties involved to work out an alternative solution besides the bankrupting of a key US industrial entity.

It is likely that negative sentiment ay build going into next week as the end of the curve issue of employment will grab hold of traders focus. The US read on unemployment begins next Wednesday and culminates on Friday with the release of the BLS figures on nonfarm payrolls and unemployment.

Early gains in the market were achieved in the face of mixed economic data as worse than expected readings on US personal income and consumer spending were checked by fewer than expected new unemployment claims and a higher reading from the Chicago Purchasing managers Index. Earnings were mixed today as lower profits from Exxon Mobil due to falling crude prices were offset by better revenue numbers from Visa. NASDAQ futures posted the highest gains today on better earnings from Expedia and continued inflows of capital into companies that are perceived to have relatively low debt levels and strong cash positions.

Technically, June Dow Futures tested and bounced off a significant resistance level at 8260. The pullback came from a classic overbought 60 minute RSI indicator which peaked very close to 70 this morning. Support for the Dow has set initially at 8070, with 7992 as a likely support for Friday’s session. Looking into next week, the market could see a further pullback to test the low end support of 7835. New up target resistance level seems to be setting up at 8368.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8225	8255	8085	8126	1
SPM9 (JUNE S&P)	880.00	885.70	864.80	870.00	0.90
NDM9 (JUNE NASDAQ)	1396.00	1418.00	1382.50	1393.50	15.75

Published on Fri, May 1 2009, 06:11 GMT

US Equities rally to fresh technical highs

Thu, Apr 30 2009, 05:43 GMT
by Paul Brittain

Alaron

US EQUITIES RALLY TO FRESH TECHNICAL HIGHS AS FOMC KEEPS NEAR ZERO RATE POLICY ON HOLD.

US Equities rebounded on Wednesday as fears regarding the economic costs of the growing swine flu epidemic subsided and the Federal Reserve offered signals from its rate meeting that the worst of the recessionary slide may be behind the US economy. Equities closed slightly off of their best levels of 2009. Stocks managed to post strong gains before the Fed meeting boost of recovery optimism as a worse than expected performance in US GDP was shrugged off by equity buyers as they seemed to find “diamonds in the rough” within the GDP figures (consumer spending was up 2.2%).

The verdict seemed to come in on the 1st quarter earnings season as well.
Measures released today showed that the ratio of companies that met or beat earnings expectations to those that fell short was nearly 10 to 1. Buyers also fled the secure Treasury markets and moved into equities and commodities as the US dollar fell and risk tolerance increased in the wake of subsiding concerns regarding the potential economic consequences of the evolving swine flu epidemic. A renewed sense of stability in the markets based on the comments by the Federal Reserve will likely cause the markets to pay special attention to the minutes of this latest meeting in order to establish further clarification of the extent by which recovery has been achieved so far and if the potential for inflation and a time frame for pulling back on the “golden goose” of easy monetary policy.
Expect the markets to take a session to digest the ramifications of the Fed decision.

Technically, June Dow Futures continue their upward trend toward a resistance level of 8260. The market should likely experience a pullback ahead of that move back to support at 7975. 7862 sets up as a key level of support for this market, with 7690 as a key Fibonacci 61.8% retracement level. Look for the market to hold above that level in the wake of a strong pullback.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8030	8205	8030	8125	158
SPM9 (JUNE S&P)	861.00	879.00	858.50	869.10	17.30
NDM9 (JUNE NASDAQ)	1370.00	1398.00	1369.00	1377.75	17.25

Published on Thu, Apr 30 2009, 05:43 GMT

US Equities fall in volatile session as banking concerns

Wed, Apr 29 2009, 05:38 GMT
by Paul Brittain

Alaron

US EQUITIES FALL IN VOLATILE SESSION AS BANKING CONCERNS, SWINE FLU EVOLUTION OVERCOMES GROWING CONSUMER OPTIMISM, IBM DIVIDEND INCREASE.

US Equities slipped on Tuesday in a tug of war session that saw the indices swing between gains and losses. Negative sentiment won out on the session as fresh worries regarding Bank of America and Citigroup’s capital positions and swine flu developments offset a surprisingly positive read on consumer confidence and IBM’s boosting of its dividend.

Citigroup and Bank of America, two of the main poster children for the current banking crisis, came under pressure today after US regulators told the banks that they would likely not pass criteria set by US government “stress tests” and would need to raise additional capital. Citigroup and Bank of America responded by announcing proposals to increase conversion of preferred stock and sell off businesses such as Nikko Securities.

The banking woes set the tone for the early part of the session. Turnaround to positive territory for equities was fueled by reports showing U.S. house prices slowed in February while consumer confidence in April had its biggest jump in more than three years.

IBM gave the Dow its biggest boost, after its board approved a 10 percent increase in its dividend and authorized a stock buyback. Once again, the tech sector offered the most opportunity today due to its stronger cash position. By the end of the session though, the inability to break through any new resistance levels and lingering concerns regarding the evolution of the swine flu breakout eroded gains for the major indices, though they did close significantly off of their lowest levels of the day.

Technically, June Dow futures remain above support at 7870. Upward target for the market remains at 8169. However continued range trading is likely to increased downward momentum that should likely test 7640. Look for a key downward target to be 7270.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7895	8040	7885	7967	-35
SPM9 (JUNE S&P)	844.50	861.00	843.00	851.80	-5
NDM9 (JUNE NASDAQ)	1361.00	1378.00	1355.00	1360.50	-12.75

Published on Wed, Apr 29 2009, 05:38 GMT

US Equities fall on swine flu concerns

Tue, Apr 28 2009, 06:22 GMT
by Paul Brittain

Alaron

US EQUITIES FALL ON SWINE FLU OUTBREAK CONCERNS, POTENTIAL THREAT TO TRAVEL AND TRADE. CONCERNS OVERSHADOW AGGRESSIVE COST CUTTING AT GENERAL MOTORS, HEALTH CARE GAINS.

US EQUITIES retreated, following in the path of Asian and European indices, on the concerns that the spreading of a new strain of swine flu could disrupt global travel and trade, offering another unforeseen stumbling block to cautious optimism regarding the global economy. The market received its apparent wish regarding issues to worry about, as the negative sentiment from the growing flu outbreak overshadowed better than expected earnings reports from the pharmaceutical sector, new costing cutting initiatives from General Motors, and a drop in the Libor rate to levels not seen since before Lehman Brothers. This last development seems to be offering an indication that elements of the credit freeze are beginning to thaw.

These bright spots were unable to overcome the gloom of the potential for forced restrictions of travel and trade derailing the fragile, initial signs of global economic stabilization. Until the uncertainty of a flu vaccine can be developed, the markets will likely continue to bear potential developments from this issue into future volatility. Tensions increased as the European Union and the United States both issued travel warnings to each other’s region unless absolutely necessary. In addition, Russia and China announced a cutoff of pork imports from region of the United States and Mexico, further pressuring the material and agricultural sectors.

While the markets were able to take focus from events beyond the financial sector for once, it offered little comfort. In the aftermarket, futures continued their retreat after the WHO (World Health Organization raised the pandemic alert from stage 4 from stage 3.

Technically, June Dow Futures appear to be getting somewhat top heavy and should setup for a pullback to the 7850 level. Resistance within this range remains set in at 8123. Additional support has set in at 7780.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7930	8075	7925	8002	-54
SPM9 (JUNE S&P)	852.00	865.50	850.50	856.80	-9.70
NDM9 (JUNE NASDAQ)	1358.00	1384.00	1354.50	1373.25	-1.75

Published on Tue, Apr 28 2009, 06:22 GMT

Traders take direction from banking stress test hopes

Fri, Apr 24 2009, 06:07 GMT
by Paul Brittain

Alaron

US EQUITIES CONTINUE TO TRADE IN NARROW, VOLATILE RANGE. TRADERS TAKE DIRECTION FROM BANKING STRESS TESTS, HOME SALES DATA.

US EQUITIES struggled within a tight range, searching for direction in a session that was defined by conflicting data regarding earnings and readings from the housing sector. Traders and investors contended with better than expected earnings from Apple, which lifted the tech sector, as well as disappointing results from UPS. In addition, the negative side of the blotter offered lower than expected reading on US existing homes sales pressured market sentiment which had been supported yesterday by monthly back to back increases in home prices.

A late session push to the highs of the session occurred led by the financial sector. The move higher was led by rising hopes regarding the US banking stress tests and optimism regarding a meeting between President Obama and the heads of a number of credit card companies for the purpose of hashing out details regarding a credit card “bill of rights” for US consumers. S&P futures posted the highest session gains powered by financials. Once again, perceptions of progress and removal of uncertainty offers a positive bias to the market. Friday’s session offers another reading for the housing market (US new home sales). Expectations are for the market to be active in early session trading, settling into a tight range as traders square up positions for the week, settling near the 842.00 level for the S&P and 7893 for the Dow.

Technically, June Dow futures are likely to trade within a narrow range on Friday.
Expect the market to trade between 7960 and 7855. In a choppy, narrow trading range, sometimes less said is better. The key at this level is risk and money management. Seek out good support and resistance levels within ranges to trade.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7845	7930	7750	7915	99
SPM9 (JUNE S&P)	842.30	850.00	831.50	848.70	11.80
NDM9 (JUNE NASDAQ)	1340.00	1345.00	1318.00	1342.00	18.50

Published on Fri, Apr 24 2009, 06:07 GMT

US Equities trade through a seesaw session

Thu, Apr 23 2009, 05:50 GMT
by Paul Brittain

Alaron

US EQUITIES TRADE THROUGH A SEESAW SESSION. VOLATILITY THE CONSTANT AS EARLY LOSSES REBOUND TO GAINS, RETURN TO LOSSES AS OUTLOOK FOR FINANCIALS CONTINUE TO CHALLENGE.

US EQUITIES continued its “Ginzu” style of slice and dice trading as the major indices continue to struggle with the ADD aspect of trying to interpret earnings, government reports, official comments and man on the street whispers.

US equities fell on Wednesday as a late sell-off in the financial sector erased gains made during a choppy trading day on Wall Street as investors digested another busy day of earnings. Earnings were a mixed bag today. Morgan Stanley reported lower and announced it was slashing its dividend. Negative sentiment turned around after Wells Fargo reported a record 1st quarter. Gains were tied primarily to business in mortgage refinancing and its acquisition of Wachovia Bank. Wells Fargo has now passed Bank of America as the US largest holder of consumer mortgages (cause for joy or potential concern?)

The rebound in equities continued to gain momentum on comments from Treasury Secretary Geithner stating that the government would seek to remove itself from the workings of the banking industry as soon as it found a viable opportunity to do so. Additional upward momentum was found from a report showing US home prices posting their first monthly back to back increase in two years. Equities rallied to the top end of their recent range. Failure to pierce these levels and growing concern regarding the quality and sustainability of earnings in the financial sector eroded confidence and drove the major indices to close near the lows of the session. Based on this move, it would appear that Thursday’s reading on existing home sales may be setting up to be a more important indicator for market sentiment that previously thought. Expect continued volatility within the market’s range. A possible test of 824.00 in the S&P and 7670 in the Dow may set up tomorrow if the existing home sale disappoints.

Technically, June Dow futures should find a strong level of support at 7630. A break of this level should set up for a test of 7430. Look for near term resistance to form at 7970, with 8160 remaining as a key breakout level. (options strategists take note.)


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7855	7995	7805	7816	-107.00
SPM9 (JUNE S&P)	838.00	858.50	835.50	836.90	-10.00
NDM9 (JUNE NASDAQ)	1319.50	1362.00	1315.00	1323.50	-4.50

Published on Thu, Apr 23 2009, 05:50 GMT

Majority likely to pass Government "STRESS TESTS"

Wed, Apr 22 2009, 05:32 GMT
by Paul Brittain

Alaron

US EQUITIES REBOUND ON TREASURY SECRETARY COMMENTS REGARDING US BANK BEING “WELL CAPITALIZED”. MAJORITY LIKELY TO PASS GOVERNMENT “STRESS TESTS”

US EQUITIES rebounded from Monday’s pullback after early pressure from disappointing earnings abated. The turnaround was driven primarily by a positive series of comments from Treasury Secretary Geithner regarding the “well capitalized” positions of US financial institutions. According to the Secretary, preliminary readings for the government’s “stress tests” for US financial institutions are positive, with the majority of major institutions expected to pass the solvency tests set by the Treasury and government auditors. The complete results are expected to be made available on May 4th.

Additional support for equities resulted from higher than expected readings on investor confidence in the US and Europe. The renewed sense of stability helped the major averages all close near their highs of the session. Financials, Commodity, and Technology stocks led the equity recovery. A wide number of earnings offered a mixed picture today, with technologies earnings led by traditional outperformers IBM showing the most promise.

While the outlook for US financial solvency is apparently improving, it would not be surprising for traders and investors to begin to question the criteria and reliability of the government auditors’ findings. Look for a tie in between the current position and the ability for banks to provide future improved guidance. If that happens, a sustainable rally could be possible sooner rather than later.

Technically, June Dow Futures continued to trade within a range. Support is likely to be found at the 7820 level while resistance should be found at 8060. The narrowing range should be a prelude for a possible breakout to the upside test of 8160.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7735	7930	7735	7923	103
SPM9 (JUNE S&P)	824	848.5	823.3	847.7	14.8
NDM9 (JUNE NASDAQ)	1303	1331	1303	1328	14.5

Published on Wed, Apr 22 2009, 05:32 GMT

Broad Based retreat on all major indices

Tue, Apr 21 2009, 06:26 GMT
by Paul Brittain

Alaron

US EQUITIES STAGE A NOT SURPRISINGLY STRONG PULLBACK ON RENEWED CONCERNS FOR FINANCIALS EARNINGS. BROAD BASED RETREAT ON ALL MAJOR INDICES.

US equities staged a dramatic, yet expected pullback for the first trading day of the week. The major equity indices all came under pressure today as concerns reemerged about the outlook for sustained earnings and solvency for the financial sector. Earnings from Bank of America were actually better than expected.
However the bank’s increase of reserves to combat rising loan and credit defaults appeared to offer a general spook to the major indices, instituting what many felt was a necessary pullback in the markets after last week’s peaking financial rally. The sector came under additional pressure today after a New York Times article stated that the Obama administration was considering converting many of the low interest loans made to banks into common stock. Investors became distressed by this proposal, fearing that this arbitrary introduction of massive new stock issues would significantly dilute the value of current market shares. In the wake of this sentiment, Citigroup fell nearly 20% and Wells Fargo dropped 16.0%.

Rising levels of uncertainty within the financial sector translated into a major pullback among all the major indices. Energy and material stocks had one of their worst performances in April as a flight to safety spurred interest in secure fixed income as well as low yielding currencies such as the US Dollar. The result-commodities took it on the chin, pulling down the underlying equity sectors along with them. Homebuilders also pulled backed on concerns regarding the bottom feeding that the housing market appears to be going through as increased sales appear to be occurring only through extensive price cutting that fails to alleviate eroding consumer home values.

Technologies failed to spur any defense against the negative sentiment, despite the surprise announcement of Oracle’s purchase of Sun Microsystems for $7.5 billion. The deal came about even as talks were supposedly restarting between Sun and IBM. A number of companies also reported better than expected earnings, only to have their shares pulled lower. This suggests that the move lower today could be defined as an expected correction and a possible setup for another move to test the high end of the recent range.

Technically, June Dow futures continue to range trade, with Monday’s pullback holding well above key near term support at 7729. If this level is pierced, market could make an attempt at 7580. A recovery rally would likely find resistance at 7990.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7955	7965	7785	7820	-264
SPM9 (JUNE S&P)	850.80	851.70	828.70	832.90	-33.90
NDM9 (JUNE NASDAQ)	1327.00	1333.00	1300.00	1313.50	-38.50

Published on Tue, Apr 21 2009, 06:26 GMT

US Equities gain strength, as data shows economy may be stabilizing

Fri, Apr 17 2009, 05:54 GMT
by Paul Brittain

Alaron

US EQUITIES GAIN STRENGTH, AS DATA SHOWS ECONOMY MAY BE STABILIZING, ANNOUNCEMENT OF STRESS TEST DATE OFFERS SOME ALLEVIATION OF UNCERTAINITY.

US equities traded to key technical highs, with the NASDAQ closing at its high for the year, after US government statistics offered signs that the economy might be showing signs of stabilizing and technology companies “dressed to impress” with regards to earnings expectations.

The technology sector, which lagged Wednesday’s gains on a weak report from Intel, revered course to the upside on expectations of strong earnings from sector leaders Google and Hewlett Packard. The companies did not disappoint as Google reported better than expected earnings ($4.1 billion vs. $4.09 billion exp) and Hewlett Packard was shown to have taken over the top spot of PC makers from Dell. In addition, Sun Microsystems rebounded on reports that it had asked IBM to resurrect takeover talks. The cash rich sector continues to appeal, particularly as investors become more concerned regarding balance sheets and dividends. (These companies look far better than the Federal Government)

Media companies posted strong gains as the beaten down sector is beginning to find value with traders on expectations that the sector should show significant gains when the overall economy improves. These late day shots of positive sentiment helped the major indices shake off early struggles to reach positive territory. The struggles occurred in spite of data on employment and business sentiment that showed surprisingly positive gains and earnings from JP Morgan that came in better than expected. More than likely, equities appeared to be nursing a hangover from the overnight session after China reported the largest recorded drop in its GDP and Euro zone economic data continues to disappoint.

The markets should likely remain quiet overnight in anticipation of the earnings (losses) report from Citigroup. As one of the poster children for toxic asset creation, the markets have been seeking to use the bank as a signal flag for a slowing of the skid relating to the global credit crisis. The market appear to be looking for leadership from its losers rather than its winners, so look for volatility to return to the markets for at least the early part of Friday’s session, with the market offering a longer term verdict perhaps next week.

From a technical perspective, June Dow futures closed above its resistance level of 8060. Next target level should be 8140 before overbought indicators stage a pullback to the 7840 level.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	8025	8115	7915	8063	83
SPM9 (JUNE S&P)	854.80	867.00	843.30	861.50	13
NDM9 (JUNE NASDAQ)	1334.00	1359.00	1321.00	1352.00	35

Published on Fri, Apr 17 2009, 05:54 GMT

US Equities rally from lows, led by financials, consumer products

Thu, Apr 16 2009, 06:00 GMT
by Paul Brittain

Alaron

US EQUITIES RALLY FROM LOWS, LED BY FINANCIALS, CONSUMER PRODUCTS. GOVERNMENT ANNOUNCES BANK STRESS TESTS RESULTS IN MAY, REMOVING UNCERTAINTY.

US Equities recovered from overnight lows spurred by a pullback in technologies after Intel reported a larger than expected drop in profit due to slowing chip demand and UBS announced a significant 1st quarter loss and job cuts. . The markets remained under pressure through the overnight and into most of the early session. Support levels in the S&P and Dow held relatively firm and allowed for positive sentiment to grab hold of the market, pushing the major indices to close near their highs of the session.

Rising confidence in the homebuilding sector by professionals prompted the sector to post double digit gains in the afternoon while the consumer products sector received another control cost led earnings surprise. Proctor & Gamble beat analyst’s expectations and announced an increase in its dividend payout (Yes- A dividend INCREASE!). Support from these sectors also helped to boost the financial sector. American Express was the largest gainer on reports that the company was seeing a slowdown of late payments on its charge cards. Banks were also support by an announcement that the “stress tests” being performed by the US government to determine solvency. Markets took heart from the fact that a time frame appears to be setting up where financial institutions will know their fates and should begin developing models to get back to the “business of business” Technology stocks remained under pressure throughout the session after the Intel announcement and were the worst performers of the session. However the sector did close off its lows.

Technical indicators for the June Dow contract offered little change as the markets remain within range bound. Support has reset somewhat higher at 7720, with 7502 as a significant level of support. Initial resistance should be found at 8035, with a break of this level setting up a test of 8160.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7845	7995	7815	7900	96
SPM9 (JUNE S&P)	833.7	850.5	831.7	848.5	8.2
NDM9 (JUNE NASDAQ)	1309	1319	1293	1317	-7

Published on Thu, Apr 16 2009, 06:00 GMT

Us equities retreat after worse

Wed, Apr 15 2009, 06:35 GMT
by Paul Brittain

Alaron

US EQUITIES RETREAT AFTER WORSE THAN EXPECTED RETAIL SALES FIGURES PROMPTS RETURN OF RECESSION SENTIMENT. TREASURIES RALLY, INTEL POSTS LOWER THAN EXPECTED PROFITS ON FALLING CHIP DEMAND IN AFTERMARKET.

US Equities fell in Tuesday’s session after an unexpected decline in retail sales and prices at the producers’ level offered a reminder to traders that the global economy is still dealing with extraordinary recession challenges in the present. A decline of 1.3 % in March retail sales was fueled primarily by a worse than expected reading on auto sales, as the historically slow period was exacerbated by the ongoing debate regarding the fate of the 3 major US auto producers. In related news, General Motors was actually up this session after an announcement that the US government was considering a debt for equity swap for the carmaker once its reforms its company structure.

Financials posted a mixed picture in the markets today after Goldman Sachs posted better than expected earnings for the 1st quarter of 2009. While there was little surprise regarding Goldman’s exceptional performance, concerns arose from the announcement of the firm’s intention to issue $5 billion worth of stock for the purpose of financing repayment of funds borrowed from the TARP program. Fears regarding the dilution of current shares pressured a number of financial institutions that may be in a position to attempt the same strategy. Goldman Sachs and Morgan Stanley both fell over 10% while Citigroup and Bank of America-the “poster children” for toxic asset relief- gained in the session on expectations that they will be unable to adopt the dilution strategy. Both banks are scheduled to report 1st quarter results this week.

Overall every market sector came under pressure today in the wake of the surprisingly disappointing data. Energies, retailers, and technology stocks led the indices lower. Intel posted a worse than expected drop in profit due to falling chip demand. The bellwether tech firm released its results in the aftermarket. A bright spot of news came from the earnings release from Johnson & Johnson. The consumer products company thoroughly beat earnings expectations through a manageable strategy of cost control that overcame decreased revenues.

Technically, June Dow Futures remain within their trading range. Market has pulled back from the overbought conditions and should still have room to correct back to support at 7680. A break of this level leaves target open to test 7450. Resistance appears to have reset to 8060.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7940	7970	7850	7884	-111
SPM9 (JUNE S&P)	846.00	853.20	836.30	840.30	-13.70
NDM9 (JUNE NASDAQ)	1328.00	1336.00	1310.00	1324.00	-8.00

Published on Wed, Apr 15 2009, 06:35 GMT

Us equities rebound from nervous opening

Tue, Apr 14 2009, 06:32 GMT
by Paul Brittain

Alaron

US EQUITIES REBOUND FROM NERVOUS OPENING AS HOPE FOR BETTER THAN EXPECTED RESULTS SPURS RALLY IN BANKS. GOLDMAN SACHS POSTS BETTER THAN EXPECTED EARNINGS AFTER CLOSE.

US Equities rallied back from a nervous opening as concerns regarding earnings took hold of the markets early in a light volume session due to the Euro Zone remaining closed for an extended Easter Break. Concerns appeared to abated after the Federal Reserve enacted its largest purchase so far of Treasury debt in order to support the environment for consumer and business lending. A renewed sense of effort to meet the challenge of the global economic crisis spurred buyer to cover short positions in many of the financial stocks. Citigroup and Bank of America both staged double digit rallies from early weakness as the renewed sense of optimism for the sector initiated last week offered speculation that perhaps the earnings picture expected from these institutions will not be as dismal as previously expected. Goldman Sachs reported better than expected earnings after the market closed. Losses on Real Estate holdings and fixed assets were overshadowed by gains derived from the companies trading operations. The company also announced it was preparing a $5 billion offering of stock for the purpose of paying back the $10 billion borrowed from the TARP programs.

The major market indices ended the session mixed. S& P futures posted a small gain while Dow & NASDAQ futures ended slightly down. General Motors fell dramatically in the session after the government ordered the failing automaker to prepare a bankruptcy plan by June 1st. The order essentially negates any hope of the company renegotiating its financial burdens outside of a bankruptcy scenario.
Energy Stocks fell early after Chevron posted less than expected profits and the IEA reported a larger than expected drop in global demand for energy consumption in 2009. This fueled a larger drop than the normal pullback expected due to fear premium coming out of the market after a long weekend.

Technically, very little changed regarding the outlook for June Dow Futures. Markets continue in a channel skirting near the high side of daily RSI. Upward Resistance target remains at 8170 while support levels set up at 7740 and 7620.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7945	8060	7911	7995	-22
SPM9 (JUNE S&P)	845.00	861.30	841.70	854.00	+1.40
NDM9 (JUNE NASDAQ)	1334.00	1344.00	1321.00	1332.00	-4.00

Published on Tue, Apr 14 2009, 06:32 GMT

Us equities join the global party rally

Fri, Apr 10 2009, 05:46 GMT
by Paul Brittain

Alaron

US EQUITIES JOIN THE GLOBAL PARTY RALLY. FINANCIALS LEAD INDICES HIGHER ON NEW STIMULUS PLANS, WELLS FARGO POSTS RECORD QUARTERLY PROFIT.

US Equities jumped on the “Easter Parade”, with financial posting a stellar rise after Wells Fargo, the 4th largest US bank, reported their 1st quarter earnings 10 days early. The largest mortgage lender in the western United States and the recent purchaser of Wachovia posted a record $3.0 billion profit (55 cents per share vs. exp 25 cents per share). Expectations of a better earnings picture and the expectation that worst of the economic crisis might be behind allowed the major financials to rally up to 30 % in today’s session. Buyers took heart from the long term revenue stream that mortgage banks such as Wells Fargo should be able to generate steady revenue in the low interest, high refinancing environment.

Additional support for equities began in the Asian markets after Japan announced a record $156 billion stimulus package. Apparently, the outcome of the G20 and its notion of global cooperation prevailed in the market today. Technology stocks rallied after analysts at Credit Suisse upgraded the price target on Tech Darling Apple Computer. In all markets are taking the short term bullishness hope from earnings over lagging indicators such as the upward marching global unemployment picture. The question the market may have to consider next will be how can sectors such as financials make money in the long term once the stimulus pulls back and these institutions are left to function on their self reliance.

Technically, June Dow Futures broke through and could be setting up to test 8160 as the next key resistance level. Failure to breech initial resistance of 8090 Support for the Dow has set up at 7820. Pullbacks on long covering should find support at 7935


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7945	8036	7920	8017	+224
SPM9 (JUNE S&P)	843.00	854.50	839.50	852.60	+30.00
NDM9 (JUNE NASDAQ)	1321.50	1342.00	1318.50	1336.00	+37.50

Published on Fri, Apr 10 2009, 05:46 GMT

US Equities post gains

Thu, Apr 9 2009, 05:56 GMT
by Paul Brittain

Alaron

US EQUITIES POST GAINS. TECHNOLOGIES LEAD MARKET HIGHER DESPITE CONFIRMATION OF FOMC GLOOMY FORECAST. .

US Equities posted gains, led by technology and commodity stocks, as equities found support from overnight downward pressure, after the US Government announced an extension of TARP (Troubled Asset Relief Program) funds to insurance companies and two major US homebuilders set forth plans to merge helped rally equities from overnight lows created from a worse than expected earnings report from Alcoa, the aluminum producer and leadoff for earnings season.

Early gains in equities were fueled by a better than expected reading on US Wholesale Trade. The figure showed that inventory was coming off producers shelves at nearly doubled the expected rate. This represents the first pickup in nearly 6 months. Energy and commodity stocks recouped recent losses after the EIA energy report showed a less than expected build in crude oil stocks. This helped rally the price of oil back above $50.00 and revitalized and number of commodities off of historic lows. Insurers rallied after the government reported that TARP funds could be extended to insurance companies that have holding banks as part of their asset base. Market gains retreated in the afternoon as the release of FOMC minutes showed the Federal Reserve downgrading its forecasts for a possible late 2009 recovery and showing a rare united front with regards to meeting the challenge of the US and global economic crisis aggressively. Stocks rebounded near the highs of the session as buyers found value particularly in the cash rich tech sector.

Technically, June Dow Futures traded quietly within a tight range. Market continues to skirt the high end of overbought indicators. The market appears to be setting up for a pullback to 7550, with additional support at 7420. Initial resistance should be met near the 7880 level, with upward breakout level at 8104.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7755	7840	7700	7793	+31
SPM9 (JUNE S&P)	816.20	825.00	811.00	822.60	+8.60
NDM9 (JUNE NASDAQ)	1288.00	1306.00	1278.00	1298.50	+17.75

Published on Thu, Apr 9 2009, 05:56 GMT

Equities continue to fall on earnings nerves, outlook for financials

Wed, Apr 8 2009, 06:17 GMT
by Paul Brittain

Alaron

US Equities fell for a second session as participants nervously awaited Alcoa, the aluminum producer and earnings bellwether, to release its 1st quarter earnings after the US markets closed. The actual release appeared to be somewhat of a non event for the broader indices. Reports showed a loss per share of 59 cents.
The loss came in slightly worse than expected. However expectations were for weakened revenue stream based on the significant drop in aluminum prices over the last year. Despite the drop in revenue, the company did post slightly better than expected sales results. This glint of optimism allowed the major indices to rebound slightly in the aftermarket, holding above key support levels.

The recent pullback in equities, based on its relative calm and honoring of support levels, suggests that profit taking is a key driver for the equity pullback rather than a strong shift in sentiment. Based on this theory, expected that volatility should pick up in the next few weeks as surprises to the upside in earnings could fire up equities to run higher.

One stock that did have an effect on sentiment this session was General Motors.
The automaker gave up nearly all of its gains from yesterday as reports surfaced that the “pension plan that occasionally makes cars” was in “intense preparations to declare bankruptcy”. Energy and material stocks also fell as crude oil fell in the wake of expected demand declines and a bearish EIA inventory number released on Wednesday.

Technically, June Dow Futures seem poised to continue a test to the downside. Near term support should be found at 7640. It is possible that this level could hold, allowing for a move back up toward 7905. Significant support remains in place at 7460. Should this level be breech, look for the next downward target at 7170. Volatility should remain high with false breakouts to the up or downside likely.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7815	7820	7710	7762	-154
SPM9 (JUNE S&P)	817.80	822.20	811.00	814.00	-16.40
NDM9 (JUNE NASDAQ)	1296.00	1296.00	1267.00	1280.75	-31.25

Published on Wed, Apr 8 2009, 06:17 GMT

IBM Sun Microsystems merger breaks down

Tue, Apr 7 2009, 06:51 GMT
by Paul Brittain

Alaron

EQUITIES DROP FIRST TIME IN FOUR SESSIONS ON SQUARING UP AHEAD OF TENSE EARNINGS SEASON, CONCERNS REGARDING FINANCIALS, IBM SUN MICROSYSTEMS MERGER BREAKS DOWN.

Equity markets pulled back from overnight highs, breaking a four session winning streak, after a prominent analyst posted a report stating that the financial sector still faces significant risks with regards to toxic assets and earnings and that government support programs may very well be insufficient to deal with the yet to emerge problems from regional and large scale banks. The ominous uncertainty proposed by this report fueled a strong sell off in the financial sector, with JP Morgan Chase and Wells Fargo both falling 4 to 6% respectively. A number of financial institutions were downgraded by Mike Mayo to “sell” or “underperform. Technology stocks had the wind taken out of their sails as disappointment regarding the breakdown of merger plans between IBM and Sun Microsystems sent a wave of negative sentiment throughout the tech sector.

The equity markets managed to rally significantly off the lows of the session toward the close, as the markets were able to digest to tech disappointment as a possible benefit due to the positive role of IBM during earnings season- an agreement to purchase Sun Micro could have been viewed as a significant dilution of earnings potential for IBM. The broader markets also managed to recover from session lows as another analyst reminded the markets that banks appeared to be on course for a series of small earnings gains that should prove sustainable. The VIX (US Volatility Index) jumped nearly 5% this session, suggesting that spring and with it Earnings Reports for 2009 1st quarter are in the air. Company reports begin on Tuesday with Alcoa first to report. Expectations are for a loss of 0.27 cents per share. Equity markets are likely to be extraordinarily choppy as earnings season kicks off, with a series of surprising gains and losses to be had for at least the next week and half until the general picture of earnings is digested and accepted.

Technically, June Dow Futures pulled back from the high end of the RSI measure, but held above a near term support of 7780. A significant level of support in the Dow has set up at 7580. If this level holds look for the Dow to move toward 8170.
A break of 7580 could set up for a drop to 7310.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7895	7935	7805	7916	-67
SPM9 (JUNE S&P)	829.00	833.80	818.80	830.40	-10.20
NDM9 (JUNE NASDAQ)	1300.00	1315.00	1286.00	1312.00	-4.25

Published on Tue, Apr 7 2009, 06:51 GMT

Equities send up a chert as G20 summit outlines trillion dollar global stimulus

Fri, Apr 3 2009, 06:19 GMT
by Paul Brittain

Alaron

EQUITIES SEND UP A CHEER AS G20 MEMBERS ANNOUNCE FINANCIAL COMMITMENTS TO COMBAT GLOBAL FINANCIAL CRISIS, FASB VOTES TO RELAX MARK TO MARKET ACCOUNTING.

The world’s equity markets sent up a resounding cheer on Thursday as members of the G20 nations announced renewed commitments of financial support and institutional regulation management through a summit which is being hailed by the members as a success. The appearance of better than expected accord and cooperation took hold of the major equity indices, allowing them to push through to their highest levels since early February of this year. The G20 Nations announced a $1.1 trillion commitment to the IMF for the purpose of jumpstarting the world’s economy out of its worst slump in decades. In addition, the world leaders agreed on the development of new regulations designed to offer more transparency for hedge funds and control over the levels of risk that traditional financial institutions are allowed to take on. Equities received an additional boost from the approval of the FASB to relax elements of the mark to market accounting rule. This ruling has been singled out as major contributors to the stress on financial institutions and the creation of the so called “toxic assets” on their balance sheets.

A renewed sense of optimism that the worst of the financial crisis may be behind allowed the major indices to post a broad based rally. The rally was barely deterred by a second day of reports showing a worsening global employment picture. Friday’s release of the US nonfarm payroll and unemployment picture for March is expected to show a loss of jobs near 700,000 and unemployment ticking up to 8.5 %. It would appear that for the time being the markets are “expecting the employment new to be worse than expected”. How long this optimism and gains in equities last is likely to be dependent upon the severity of the next shoe that drops (commercial real estate, acceleration of declining home prices0 and how personally investors take the hit. It would seem though that anything beyond the loss of individual’s home would not have the same shock value and therefore the notion that “the truth is out there” may offer an opportunity for equity markets to at least stabilize for a period of time.

Nearly every sector of equities rallied on the renewed optimism for the global economy. Energy and material stocks rallied on perceived increases in demand as well as a drop in the US dollar, which most commodities are priced in. Banking stocks rallied on the news regarding the relaxing of the mark to market accounting. Gaming stocks surged on rumors of a major buyout firm seeking to invest in the MGM Mirage/Dubai World City Center project in Las Vegas.

Technically, June Dow Futures closed right near its resistance level of 7950.
Should this level hold, the market should hit significant resistance at 8110.This level could pose a significantly overbought condition. A pullback from that resistance range should result in a gap fill to 7905. Significant support for the market should set up at 7595.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7880	8020	7845	7958	+240
SPM9 (JUNE S&P)	826.70	842.00	823.20	835.50	+26.30
NDM9 (JUNE NASDAQ)	1273.00	1312.00	1268.00	1301.50	+50.50

Published on Fri, Apr 3 2009, 06:19 GMT

Equities gain as good data triumphs over evil employment outlook

Thu, Apr 2 2009, 10:42 GMT
by Paul Brittain

Alaron

EQUITIES BEGIN 2 ND QUARTER WITH GAINS. BETTER DATA ON HOUSING AND MANUFACTURING TRUMPS ADP REPORT, LOOMING US AUTOMAKER BANKRUPTCY.

US Equities began the 2 nd quarter of 2009with a solid performance that overcame early adversity driven byominous data releases. The major equity indices remained under pressurethroughout the overnight session after sentiment dropped due tocomments from the Obama administration that bankruptcy might be theviable outcome for General Motors and/or Chrysler. A slew of bad datafrom the Euro zone kept equities under pressure throughout theovernight session. A brief pre market rally was cut short by therelease of the ADP employment report, which tracks jobcreation/destruction in the private sector. The reading came in at ahigher than expected -742,000 vs. previous reading of -697,000.

It would appear though that market sentiment had become used to worsethan expected bad news with regards to the employment picture.Perception also appeared to be building a longer term view into theemployment picture as a gleam of optimism was found in Tuesday’s USConsumer Confidence reading on future outlook for jobs.

The leveling off of job loss shock allowed for a recovery in equitiesfueled by better than expected reading from the ISM manufacturingsurvey and US pending home sales. Both of these indicators showedimprovement over the previous month and allowed for a renewed sense ofoptimism on the economy. Material and Financial stocks led the indiceshigher. Bank stocks were particularly buoyant today on expectation ofan announcement from the Financial Accounting Standards Board regardingmark to market accounting.

One sector that did not fare well was not surprisingly the auto sector.General Motors fell, but recovered from its session lows after proposedplans by the Obama Administration for a “controlled bankruptcy”Overall, it would seem that this bad news for GM Shareholders-the oneswho have not been playing this as a speculative penny stock-could beperceived as a positive note for the market, as the notion that “a badending is better than no ending at all”

Technically, June Dow Futures staged a nice rebound off an initialsupport level of 7430. The market continues to experience volatilitywithin its range. Holding within this range should allow for upwardrally to 7960 resistance level. Support should be found at the 7550level.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7440	7730	7430	7718	+280
SPM9 (JUNE S&P)	781.50	810.30	779.50	809.20	+14.40
NDM9 (JUNE NASDAQ)	1215.00	1255.00	1209.00	1251.00	+13.50

Published on Thu, Apr 2 2009, 10:42 GMT

Financials rebound in wale of poor data

Wed, Apr 1 2009, 07:07 GMT
by Paul Brittain

Alaron

EQUITIES MAINTAIN VOLATILE TONE, REBOUNDING FROM MONDAY DROP ONAGGRESSIVE “REINVENTION “CHALLENGE FROM AUTOMAKERS, FINANCIALS REBOUNDIN WAKE OF POOR DATA.

US Equities demonstrated their seemingly never endingvolatile tone as the markets regained their poise as the end of themonth and the quarter posted the strongest monthly gains in years.Despite the release of several pieces of worse than expected economicdata, the markets seemed to regain composure and an appetite for risk,as demonstrated by the lackluster performance of safe haven currenciesand traditional hedging products (gold & silver).

The markets achieved initial positive sentiment on theback of financials which rallied in the wake of the TED spread breakingbelow a key psychological level.
Traders perceived this as a sign ofincreasing confidence in the banking sector as well as possibleincreased in financial institutions willingness to offer credit. Inaddition, the markets received additional support from announcements byFord and General Motors of new loan payment support plans for buyersthat lose their jobs. While the stocks themselves came under pressure,the overall effect on market psychology was quite supportive.

Technology and material stocks gained on analysts upgrades forMicrosoft and Alcoa. Copper prices also posted their largest monthlygains since 2006. The gains were fueled by a weaker US Dollar,potential shortages in copper stores, and perceived increases in demandfrom China.

Equities will likely remain volatile as they have during the USpayrolls week.
Wednesday offers the first glimpse of the employmentpicture for March with the release of the ADP employment report. Itcomes as little surprise then that the equity markets staged a strongpullback at the close of the session which followed through into theaftermarket session.

Technically, June Dow Futures filled in the gap leftfrom yesterday’s pullback, retracing to the 7620 level. The marketappears to be looking for further downward movement back to the 7480level. A stronger level of support appears to be setting up at 7395. Ifthis level can hold, look for move back to 7620. Otherwise, the marketshould continue down further to 7290.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7562	7670	7501	7562	62
SPM9 (JUNE S&P)	791.50	807.00	786.70	794.80	10.50
NDM9 (JUNE NASDAQ)	1233.00	1258.00	1226.00	1237.50	14.75

Published on Wed, Apr 1 2009, 07:07 GMT

Financials Commodity Stocks Pressired

Tue, Mar 31 2009, 06:11 GMT
by Paul Brittain

Alaron

EQUITIES FALL BACK THROUGH PRE RALLY LEVELS AS US GOVERNMENT REJECTION OF AUTOMAKERS TURNAROUND REVIVES SPECTRE OF BANKRUPTCY, FINANCIALS COMMODITY STOCKS PRESSURED.

US Equities began the 1 st week of the month on a familiarpattern, staging strong gains as the expectation of dismal governmentreports on employment and the sense of an overdue pullback for therecent run up in stocks took hold of the major indices today.Financials and automaker s led the markets lower as Treasury SecretaryGeithner stated that a number of currently distressed financialinstitutions may need additional financial support, even as the TARPfunds available continue to be drained down. The Secretary stated thatapproximately $135 billion of the $700 billion is left and the prospectof further request for funds is not out of the question. Thereemergence of concerns regarding further bailout of financialinstitutions hit Citigroup, Bank of America, and Wells Fargoparticularly hard. All of the banks suffered double digit percentagefalls today. The sector came under early pressure after Europeanintervention to shore up domestic lenders help to rekindle fearsregarding the security of global financial institutions.

The greatest stone around the neck of the equitymarkets today was the negative sentiment fueled by the rejection of theturnaround plans proposed by General Motors and Chrysler. The sectorwas already reeling from the uncertainty posed by the forcing out of GMCEO Rick Wagoner. A particularly strong tone taken by the USAdministration proposed the notion that US automakers must not bebecome “wards of the state” and that if unable to formulate workablestrategies and alliances, declaring bankruptcy was a viablealternative. While acting as a catalyst for the markets pullback, thenotion of one or more of the 3 major US automakers declaring bankruptcyappears to have more of a tone of resignation than financial panic.Equity markets may be seeking further clarification for the rational ofthis stern stance. Traders should be careful for a “clarification” ofthis statement which could leave a wider shade of gray for theautomakers to maneuver within. Industrial and energy stocks alsodeclined as energy prices dropped over 7 % in the wake of a perceivedover estimation of world demand as well as a significant rise in thevalue of the US dollar.

Technically, June Dow Futures should find its first support level at7349, with key support remaining in place at 7260. Market should seekto fill in gap left from 7601, with movement above this level settingup for a possible rally to 7970.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7555	7560	7382	7480	-282
SPM9 (JUNE S&P)	794.00	794.70	775.70	784.30	-31.00
NDM9 (JUNE NASDAQ)	1231.00	1232.00	1203.00	1227.75	-33.25

Published on Tue, Mar 31 2009, 06:11 GMT

Equities push trough and hold above key resistance levels

Fri, Mar 27 2009, 06:38 GMT
by Paul Brittain

Alaron

EQUITIES PUSH TROUGH AND HOLD ABOVE KEY RESISTANCE LEVELS AS BETTER THAN EXPECTED TREASURY AUCTION RESULTS SUPPORT CONFIDENCE FOR US RECOVERY STRATEGIES.

US Equities broke through significant resistance levels today, allowing the major market indices to remain on track for their best monthly gain in decades.
NASDAQ futures rallied into positive territory for 2009 as the cash rich sector garnered support from renewed positive sentiment regarding the US government led recovery plan. Early gains seemed destined to stall out again until the results of the final Treasury auction of the week-a record $24 billion of US 7 year notes-posted a very respectable bid to cover and lower than expected yield.

Commodity, Technology, and Retail stocks led the markets higher today as better than expected earnings reports from Best Buy and ConAgra Foods allowed the creation of a somewhat longer term outlook for recovery in these basic sectors.
Rising commodity prices, particularly in energies, helped to support a broad based rise in equity prices The rise in these sectors was strong enough to overcome pressure in the financials after Treasury Secretary Geithner testified before Congress today, calling for sweeping overhauls and creations of new oversight powers for the purpose of controlling the levels of risk that financial institutions are allowed to take.

Technically, June Dow futures broke through and held above a key resistance level of 7800. While the move higher is beginning to look slightly toppy for the week, there is a setup for a possible test of the 7990 level, with the next key level of resistance at 8090.Support has reset at the 7460 level.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7765	7880	7700	7849	+169
SPM9 (JUNE S&P)	818.00	830.50	811.00	827.30	+19.10
NDM9 (JUNE NASDAQ)	1254.00	1282.00	1249.00	1273.00	+39.50

Published on Fri, Mar 27 2009, 06:38 GMT

Equities Srage Volatile Session

Thu, Mar 26 2009, 06:12 GMT
by Paul Brittain

Alaron

EQUITIES STAGE VOLATILE SESSION. SWING BETWEEN GAINS AND LOSSES AS ECONOMIC DATA YIELDS TO POOR AUCTION RESULTS, RALLY BACK ON CLOSE FROM INSTITUTIONAL BUYING

US Equities kept traders on their toes Wednesday as seemingly unforeseen waves of volatility kept hitting the markets today, supported by data influenced changes in sentiment. Early gains broke to test new highs for the recent recovery from mid 1990 levels. These gains were fueled by early reports showing the first rise in US durable goods in six months and a better than expected reading on new home sales. Upward momentum appeared to stall again as S&P 500 futures tried to test the 820 level again. As this level failed, the markets were rocked by a poor reception for a record $34 billion of US 5 year notes, particularly as foreign buyers of US debt were conspicuously absent from bidding. This drop in global confidence for the US government’s ability to fund and lead the economy out of its worst financial crisis in decades sent equities decisively lower, running a number of stops and spurring a wave of covering long positions from Monday’s major in rally in the equity markets.

As the markets seemed poised to set up for a test of newly entrenched support levels, a wave of institutional buying came into the markets in the closing hour of the equity session, allowing the major indices to close near their opening ranges with some slight gains. Financials were one of the most volatile sectors today swinging between gains and losses. The sector staged a massive upswing in the closing hour, with JP Morgan rallying 10%, BOA up 6.7%, Wells Fargo up 5.9%. NASDAQ futures closed slightly lower as the telecom sector fell on a downgrade of ATT’s debt.

Technically, June Dow futures made an attempt to test resistance at 7816.
Volatility remains a significant challenge to posting technical measures. Support for the Dow remains in place at 7260. Look for upward momentum to find initial resistance at 7894. Downward gaps should find a support level at 7417.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7665	7800	7495	7680	+60
SPM9 (JUNE S&P)	808.50	823.20	787.00	808.20	+4.80
NDM9 (JUNE NASDAQ)	1242.00	1262.00	1204.00	1233.50	-2.75

Published on Thu, Mar 26 2009, 06:12 GMT

Markets digest details of treasury plan to clear toxic assets

Wed, Mar 25 2009, 06:13 GMT
by Paul Brittain

Alaron

US EQUITIES STAGE RETREAT ON CLOSE. LATE RALLY IN LONG END OF YIELD CURVE MOVES MONEY FROM EQUITIES. MARKETS DIGEST DETAILS OF TREASURY PLAN TO CLEAR TOXIC ASSETS.

US Equities fell back, closing near the lows of the session. However the pullback was considered relatively modest in the wake of Monday’s massive rally as the outline for the US Treasury plan to remove toxic assets from financial institutions books was presented. The pullback was lead by the financial sector-Monday’s biggest gainer- as caution regarding the success outlook and potential cost, both monetary and with regards to future control over the institutions. Citigroup, Bank of America, and Wells Fargo were the biggest decliners in the sector. Morgan Stanley bucked the trend, rising over 2% on expectations that the bank will be in one of the best positions to attract private investors to its version of the public/private investment pool.

The overall positive tone for equities throughout the session was also supported by a report that home prices actually rose in February and that mortgage demand was expected to increase in 2009. Equities did turn negative and headed for the lowest of the session after the Federal Reserve announced that it would begin purchasing Treasuries on Wednesday. This announcement caused the long end of the yield curve to rise over 2 basis points, creating a chase for secure yield which caused money to move out of equities and into higher yielding fixed income. Commodity and energy stocks also fell as energy prices retreated ahead of Wednesday’s EIA inventory report as well as a recovery in the US dollar against most of the major currencies.

Technically, June Dow Futures did not make any major technical moves today and remained well within key support and resistance levels. Significant resistance remains between 7960 and 7995. Support remains in place at 7260. Market appears poised to fill in gap back to 7520 before regaining upward momentum to retest resistance levels.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7640	7745	7598	7620	-92
SPM9 (JUNE S&P)	809	819.8	801.2	803.4	-13.90
NDM9 (JUNE NASDAQ)	1245	1255	1231	1236.25	-15.75

Published on Wed, Mar 25 2009, 06:13 GMT

US equities skyrocket as Treasury plan is given "thumbs up" support by key money managers

Tue, Mar 24 2009, 10:13 GMT
by Paul Brittain

Alaron

US EQUITIES SKYROCKET, ERASING MOST INDICES LOSSES FOR YEAR, AS TREASURY PLAN TO REMOVE TOXIC ASSETS IS GIVEN “THUMBS UP” SUPPORT BY KEY MONEY MANAGERS. EXISTING HOME SALES POST BETTER THAN EXPECTED GAINS.

US Equities staged their largest one day rally since the beginning of the new Presidential administration, with S&P futures closing above 800 for the first time since mid February, as the US Treasury outlined its plan to work with the private equity community to deal with the toxic assets that continue to plague the global financial system and fuel the ongoing credit freeze up. The plan was well received by a number of major private equity entities such as Pimco and Black Rock Private Equity. Both of these financial management firms offered their support for the plan and stated their commitment to participate.

The acceptance of the plan triggered a broad based rally led not surprisingly by the financial sector. Bank of America rose over 20% and Citigroup rallied near 18%. The exceptional support for the plan appears to stem from the notion that the government would be taking control of the financing terms for the joint ventures on extremely generous terms. This perceived winning strategy is perceived as a strong draw to bring back a lot of the “smart money” which pulled out of the market in mid 2008 and has been waiting for the right terms and structure to be put into place in order to draw back working funds into the financial markets (Yes Virginia, there is money out there.)

Key points of the plan include initial joint investment from private equity and Tarp funds creating a public private fund worth about $500 billion. The investors as well as the fund will buy the bad loans at auction using loans that will be guaranteed by the FDIC. The financial institutions will have the ability to decide which of the toxic assets they wish to offer and which they will try to make a go of on their own.

The markets have been at this crossroads before. A sustainable rally will likely be contingent upon how quickly the financing program can be put into place. Even more significant will be the measure of the banking sectors ability to raise and offer credit once these assets have found new homes.

Equities also received additional happy news from a better than expected existing home sales report which offered the largest monthly increase since July 2003.

Technically, June Dow futures settled near a key resistance level of 7750. If this level can be breeched and held above, look for the market to find significant resistance at 7910. Pullback in Dow could move back to 7580 before next move up. Support has reset at the 7310 level.


EQUITY RANGES	OPEN	HIGH	LOW	CLOSE	CHANGE
DJM9 (JUNE DOW)	7400	7745	7365	7712	497
SPM9 (JUNE S&P)	783.5	821	780.5	817.3	53.2
NDM9 (JUNE NASDAQ)	1214	1259	1202	1252	64

Published on Tue, Mar 24 2009, 10:13 GMT

Equities rally on GMAC lifeline

Wed, Dec 31 2008, 13:09 GMT
by Paul Brittain

Alaron

EQUITIES FUTURES RALLY MOST IN A WEEK AS TREASURY THROWS GMAC A $6 BILLION LIFELINE TO SUPPORT LENDING.

US equities decided to let the “Times Square Ball” drop early by staging their largest rally in nearly two weeks after the US government announced a new support plan for the struggling finance arm of General Motors (GMAC). The plan will consisted of a $5 billion direct purchase of GMAC and a $1 billion loan to General Motors to assist in the restructuring of the near frozen financing & banking arm of the beleaguered company. Share of GM and Ford rallied on the announcement as beliefs regarding the supposed “end of the road” regarding government support of the industry appear overdone. While the overall equity market rejoiced in todays session, sentiment could change quickly if the details of this restructuring of GMAC are not forthcoming within what the market perceives as a reasonable time period. Questions that will need to be answer for this positive sentiment to be built on will be; What will GMAC’s business model be? How much market capitalization will it be allowed to have? What companies and/or entities will have the responsibility of developing and overseeing the restructuring of GMAC (PIMCO, perhaps)? If these questions are not answered quickly and if they do not contain some dynamic answers, then the effect of this rally catalyst should fade rather quickly.

Rohm Haas, the chemical company whose takeover by Dow Chemical appeared in jeopardy Monday recovered by nearly 12 percent yesterday after closer examination of the agreement between the chemical giants determined that it may not be so easy for Dow to walk away from the merger. Dow Chemical had initially planned to use the cash from a major chemical project with the government of Kuwait. Over this past weekend, the deal broke down, sending equities lower. Todays recovery appears to be driven by a winning out of feelings of security as the financial support of the government and the falling of the VIX (volatility index) to a three month low was enough to give the overall market a reason to shout an early “Happy New Year!-What took you so long?” The positive sentiment remained strong enough to overcome data regarding US consumer confidence, which fell to its worst level in 41 years, home prices which fell nearly 20% year over year, and a report that the health of Apple Computers chairman Steve Jobs may be taking a turn for the worst. Jobs is a cancer survivor and recent video has brought up new questions regarding his health status. With trading volume relatively low, it would appear that the market chooses to focus on certain elements and run with that sentiment for the trading session.

Technically, the market remains rangebound. Breakouts above or below the current channel of 8200 to 8600 in the Dow are unlikely to hold due to lowered trading volume. Technicals that can measure range bound markets, such as RSI, might be effective to employ in this type of market. This rangebound market will likely remain until the second week of January when initial capital that needs to be put to work enters the market place. This commitment of yield hungry resources could offer the opportunity for the Dow to breakout above the 8800 level, resetting the support ranges higher and perhaps confirming at least a near term bottom for the market. Upside potential could be determined by market seeking to end year above key resistance levels (8800 in Dow, 900 in S&P)

March Dow futures settled at 8640, up 152. S&P futures settled at 888.20, up 17.50. NASDAQ

Futures settled at 1206, up 30.50.

Published on Wed, Dec 31 2008, 13:09 GMT

The New NASDAQ−Dow Report

Mon, Jul 28 2008, 13:19 GMT
by Carley Garner

Alaron

For Monday July 28th

Index Overview

Friday mornings excitement over a rise in Durable Goods, Consumer Confidence and lower Energy got Friday morning’s market off on a positive start, which later fizzled out and the market lost momentum and started trading in a choppy fashion for the rest of the day with the Stock Indexes closing in an array of slightly higher and lower on the day. Floor sources pointed out that it being Friday, many traders folded up early to get a jump on the weekend.

The Dow closed down 35 points at 11316 which is also the 13 day moving average, many technical traders are looking for further selling with a target below 11264 and possibly as low as 11162. They are also quick to point out that the market is shrugging off bullish news and failing at repeated attempts to hold on to any rallies. In our opinion, this recent sell-off in the Dow could be nothing more than a digestion of the last two weeks 800-plus point rally, and are looking forward to buying off of those same support levels.

The NASDAQ closed higher than its siblings with a gain of over 21 points. Technically speaking the NASDAQ is trading at its Fibonacci support level and if this holds we could see the market lead the other indexes on its way higher, with price projections at around 2100 in the fourth quarter.

Published on Mon, Jul 28 2008, 13:19 GMT

Stocks Prove to be Resilient, but Monday Differ

Mon, Jul 21 2008, 15:38 GMT
by Carley Garner

Alaron

Earnings, options expiration, tame crude oil futures and oversold technical conditions have saved the stock indices this time around but many are wondering if a retest of the lows is imminent. Despite being a bull at heart, I see significant resistance in all of the major indices. While the Dow seems to be trading above (and holding) my original target, the S&P and the NASDAQ aren’t sharing the same technical success. This isn’t a surprising phenomenon given the fact that the Dow was the index that led equities lower.

The story of the day was Citigroup earnings which posted a large loss but still managed to beat expectations. According to assets, Citigroup is the nations largest banking company lost $2.5 billion dollars, or the equivalent of 54 cents per share, in the second quarter. Most analysts were looking for losses of closer to 66 cents per share.

Trading in crude oil futures remained highly volatile but still managed to end the day on a quiet note. For once, energy market action didn’t seem to be the primary driver of stocks.

We are officially in the midst of what is commonly referred to as the “summer doldrums”. Despite large trading volume in stock index futures in light of the recent volatility, it seems like option traders have taken to the sidelines…or at least that is what I am being told from some floor brokers.

I would prefer to see higher trade first thing Monday morning, but the market’s tone doesn’t seem to be overly bullish. Those short puts as recommended in this newsletter shouldn’t take any action. Things are looking promising in terms of premium erosion.

Sorry that today’s commentary was so short, have a great weekend!

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

Dow Recommendations...

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

Position Trade -

· June 18th - I recommended selling the July Dow (big or mini) 11,000 puts for 50 ob
* Place an order to buy this option back for 10 ticks or better
* July 14th – Clients were instructed to roll out the position by buying back the July 11,000 near 100 points and selling the August 10,500 put for a credit of about 130. If you haven’t done this, it is likely a good idea to do so. Contact me if you have questions.

· June 27th - Buy 1 September 109 put and sell 2 103 puts, this can be done near even money. The trade makes something with the market anywhere between 10,900 and 9,700 at expiration with the max benefit being at 10,300 ($3000 in the mini and twice that much for the big). The risk is unlimited below 9,700!

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

Nasdaq Recommendation

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

Position Trade - Flat

Published on Mon, Jul 21 2008, 15:38 GMT

Post FOMC Rally Goes Down in Flames

Thu, Jun 26 2008, 14:49 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

After a few intraday dips that looked to spell disaster, equities managed a rally going into the close of trade but most importantly expiration of the June options and futures (AKA quadruple witching). Whether this was the “bottom” or simply an artificial option expiration rally is yet to be known, however I am leaning toward the upside here.

Today was the last trading day for the June futures. If you held the contract into expiration you will be facing the consequences of being forced to accept the CBOT’s cash settlement price. The final settlement price is based on a seemingly arbitrary calculation and the outcome may or may not be in your favor. Trading is difficult enough, I don’t recommend leaving the monetary results of your trading up to someone else’s interpretation of what the contract may be worth. If you like to take chances like that, come to Vegas I will show you around the casinos.

Crude oil crumbled, falling nearly $5 per barrel on the session. This doesn’t make a bear market in energies and certainly doesn’t make crude oil a bargain but it does give investors hope and that is a good start. Let’s face it, stock prices are built on hope. Hope of future earnings, hope that shares will be worth more in the future, etc.

The S&P failed to reach swiftly oversold levels, but the Dow did. The quicker of my clients was able to get a fill on the recommendation in yesterday’s report to sell Dow puts. Others were working orders today with little luck. However, the correction may not be over. We will try to sell puts in the coming sessions. Stay tuned for details.

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

Dow Recommendations...

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

Position Trade –

June 18th – My clients were recommended to sell the July mini-Dow 11,000 puts and were filled at 50.

* Only the quick were filled on this trade, for those that missed the entry I recommend working the order for now

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 Recommendation

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

Position Trade –

Flat

Published on Thu, Jun 26 2008, 14:49 GMT

Quadruple Witching Stirs Choppy Trade

Fri, Jun 20 2008, 08:40 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

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

Dow Recommendations...

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

Position Trade –

June 18th – My clients were recommended to sell the July mini-Dow 11,000 puts and were filled at 50.

* Only the quick were filled on this trade, for those that missed the entry I recommend working the order for now

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 Recommendation

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

Position Trade –

Flat

Published on Fri, Jun 20 2008, 08:40 GMT

Rough Week on Wall Street (or Wacker if trading futures)

Thu, Jun 19 2008, 12:19 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

For the second day in a row, stock prices suffered sharp declines. Perhaps this is simply option expiration volatility but it seems like something much bigger. Some of the bearish factors in today’s session were declines in FedEx profit forecasts and a very public announcement by the Bank of Scotland suggesting that the S&P is due for a 300 point drop by the end of the summer.

There is still unresolved turmoil in the financial sector. Fifth Third Bancorp announced that it will be cutting dividends by nearly two-thirds. MF Global predicted that tight credit spreads will impact earnings and that the firm plans to sell $300 million in convertible securities to pay down a loan. Additionally, Morgan Stanley reported earnings at a 61 cent discount from the previous year. From a fundamental standpoint these items seem like disaster for the market, but from a logical standpoint it is highly possible that the market has priced in much of the risk. Despite the market despair, I believe that we are due for a bounce in the Dow.

Ron Kiddoo, Chief investment officer for Cozad Asset Management Inc. in Champaign IL commented on today’s trade, “The financials are getting hit. There just isn’t anything to spark interest in buying”. According to sources, he also believes that investors are finding it difficult to set aside worries about when the economy might show signs of strengthening.

12,000 should serve as psychological support in the Dow as well as technical. Aggressive traders may want to sell puts here. The premium seems to be extremely overpriced. I like the July 11,000 puts for 50 or better, this can be done in the mini ($250) or the full sized ($500).

You should be trading the September futures contracts by now, if you are holding June positions roll them over immediately as liquidity will soon become an issue.

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

Dow Recommendations...

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

Position Trade –

June 18th – My clients were recommended to sell the July mini-Dow 11,000 puts and were filled at 50.

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 Recommendation

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

Position Trade –

Flat

Published on Thu, Jun 19 2008, 12:19 GMT

Mixed Equities on Mixed Crude Oil

Wed, Jun 18 2008, 10:23 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

A continued string of poor economic news, ridiculous oil trade and more inflation scares capped an early morning rally in equities. What originally looked like a great day on Wall Street, turned into a non-event. The broad market barometer, the S&P 500, hugged the unchanged mark for a large part of the trading session. Boredom in both stocks and bonds may eventually trigger a counter trend move. In other words, the over all trend in equities is lower but the longer that the market stalls the more likely it is that a short squeeze will occur.

According to the Labor Department, the index of producer prices jumped 1.4% last month. This was the largest one month increase since November and suggests that many firms are currently absorbing much of the pricing pressure. The figures were much higher than the consensus estimates, although the core reading was relatively stable.

If you are a technical trader, you are likely looking for further declines in the Dow. The trend is lower, trade was heavy following the attempted rally and sentiment is low. I see major support at 12,070 and resistance at 12,417 but recommend being on the sidelines going into expiration. On a dip to support I like the idea of selling puts but picking a direction from here with certainty is a challenge.

The Nasdaq futures contract is displaying much more optimism than the Dow. In fact, the trend seems to be higher, despite an attempt to break below support late last week. As mentioned in yesterday’s newsletter, 1996 is a critically juncture for the September Nasdaq futures. If the market successfully holds at current levels we should see a continuation of the rally to 2059.

You should be trading the September futures contracts by now, if you are holding June positions roll them over immediately as liquidity will soon become an issue.

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

Dow 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 Recommendation

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

Position Trade –

June 12th – Buy 1 September Mini Nasdaq (this can be done with a big contract) at 1923 using a tight stop. Contact me for ideas.

* We missed this one…would have been nice, cancel this order.

Published on Wed, Jun 18 2008, 10:23 GMT

Quietly Higher

Tue, Jun 17 2008, 10:34 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

New high in oil, but that wasn’t necessarily a surprise. Also not surprising, however, was that after shaking equity investors and squeezing out the shorts, crude oil dropped sharply to reach a daily low of $132.84. This was a far cry from the day’s high of $139.89. As long as crude oil remains volatile and overpriced (opinion), stock traders and investors will continue to focus on trading in the energy pits. There seemed to be little explanation for the price reversal other than technical trading. Although, Saudi Arabia’s weekend decision to boost production and to Tuesday’s expiration of crude options likely played a part in the decline.

Despite progress made in the previous two trading sessions, the major stock indices still seem to be oversold with the Dow being the laggard. It seems as though there were, and still are, a lot of short positions in this market. We all know that the only way to exit a short position is to buy and I am not convinced that all of the shorts have covered that would like to.

A bounce in the September Dow futures should extend to 12,450 and perhaps higher. Remember, markets don’t go straight up or straight down. Even in a bear market, if that is in fact what we are experiencing, there will be large bounces. For reasons such as this it is important not to marry your stance (or position). Unless you have extremely deep pockets, it likely doesn’t pay to be overly bearish or bullish; instead try to be objective and go with the flow.

The Nasdaq on the other hand has traded healthy relative to the Dow and seems to be facing resistance near 1996. The next area of resistance will be found at 2061. We were recommending buying this market on Thursday but a conservative limit order on entry caused prevented getting filled on the buy. Cancel this order.

You should be trading the September futures contracts by now, if you are holding June positions roll them over immediately as liquidity will soon become an issue.

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

Dow 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 Recommendation

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

Position Trade –

June 12th – Buy 1 September Mini Nasdaq (this can be done with a big contract) at 1923 using a tight stop. Contact me for ideas.

* We missed this one…would have been nice, cancel this order.

Published on Tue, Jun 17 2008, 10:34 GMT

Stocks Battered...Again

Thu, Jun 12 2008, 07:37 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

Wednesday turned out to be another rough day for stock bulls (if there are any left). We have experienced a significant slide from the May highs leaving the Dow a few bad days away from the dreaded January lows near 11,600.

The trading and analyst team and dow-trading, a dot com signal provider, successfully predicted the move lower from the 13,000 area and is looking for prices to reach 11,700 in the near future. They believe that high commodity prices, namely crude oil, will be too much for the U.S. economy to withstand.

In Monday’s report I called for the Dow to trade lower to 12,150. Now that this is a reality, it looks like the index now has its eye on 12,070. The VIX (CBOE’s volatility index) is now trading near a respectable 24. This tells me that it is time to begin taking a serious look at option selling once again. However, I also believe that patience will be rewarded. DT Trading, my contacts on the floor, remind us that there has been a pattern for stock indices to find a low on either the Thursday or Friday before expiration only to rally into middle or end of the subsequent week.

Taking all of this into consideration, selling puts on a spike low looks to be attractive. However, the question is “how low will it go?” I recommend giving the market plenty of room to breath; in the long run it doesn’t pay to get greedy. Stay tuned for details.

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

Dow Recommendations...

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

Position Trade –

* June 3rd - Sell the Dow (big or mini) 118 put for 50 points or more
* June 6th - Despite the recommendation in the previous report, my clients were not advised to place an order to sell the June 118 puts for 50 or better. Instead we will wait until Monday in hopes of a clearer picture. If you were filled on this order don’t panic, I still feel that it will work out. Contact me for guidance.

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 Recommendation

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

Position Trade –

Flat

Published on Thu, Jun 12 2008, 07:37 GMT

Stop Running (in both directions) Dominated Trade

Tue, Jun 10 2008, 07:30 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

Stocks enjoyed a dead-cat bounce following Friday’s bloodletting but as the day wore on so did the buying interest. Weaker crude oil and better than expected news on the housing front was enough to spark a short term bounce, but bearish sentiment seems high…maybe even too high. Today’s failure to hold gains suggests that this pullback may extend losses in the Dow to 12,150.

News of Lehman Brothers’ massive second quarter write-offs are forcing the firm to raise another $6 billion dollars in order to avoid Bear Stearns style insolvency didn’t sit lightly with investors. Lehman is expected to post losses of nearly $3 billion for the second quarter. Keep in mind that Lehman is the nation’s fourth largest investment bank.

Oil and gas prices remain a focus of many investors and traders. Crude oil relaxed to the tune of about $4 on the Monday following the largest single day crude rally in history. However, the day’s plunge still leaves prices near $135, a very uncomfortable level. Unless you have been riding a bike or utilizing public transportation, you are likely aware of the fact that the national average price of gas paid at the pump is now above $4 per gallon. The difference between $3.90 and $4.00 is minimal in terms of its impact on the economy but the psychological effects may be large and it is often sentiment that moves the market as opposed to reality.

The major indices are all a bit oversold and the Nasdaq futures are near the bottom of the trading channel. Under normal market conditions I would be looking at this as a buying opportunity, however the price action seems to be a bit suspect. I prefer to patiently wait on the sideline. If you are currently short the 118 puts as mentioned below, don’t make any moves this is still a great trade.

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

Dow Recommendations...

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

Position Trade –

* June 3rd - Sell the Dow (big or mini) 118 put for 50 points or more
* June 6th - Despite the recommendation in the previous report, my clients were not advised to place an order to sell the June 118 puts for 50 or better. Instead we will wait until Monday in hopes of a clearer picture. If you were filled on this order don’t panic, I still feel that it will work out. Contact me for guidance.

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 Recommendation

**There is unlimited risk in naked option selling and futures trading
Position Trade –
Flat

Published on Tue, Jun 10 2008, 07:30 GMT

Bulls Bulldoze

Fri, Jun 6 2008, 10:40 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

Better than expected weekly jobless claims and positive retail sales sparked a sharp rally in equities. I find this a bit suspect given the fact that jobless claims is a weekly reading and shouldn’t necessarily be relied upon on a week to week basis. Although, the average seems to be better than the doom and gloom that analysts have pegged for tomorrow’s employment numbers. Most estimates are looking for a draw of about 50,000 jobs.

In case you are wondering, the mid-day selling in equities was the result of an AMBAC rating cut and a monster rally in energies. Crude oil moved sharply higher to reach levels over $128, a nearly $6 rally from low to high.

This week’s dip turned out to be a great opportunity to sell puts. I am sorry that my clients (and followers) missed it but that is the chance that you take while trying to be conservative on entry. However, I strongly believe that it is better to miss a trade completely than to be on the wrong side of a bad trade. Nonetheless, selling the June 118 Dow puts for 50 or better is still a great move. Feel free to work this order tomorrow….you never know what could happen on the heels of the payrolls data.

Sorry so short!!

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

Dow Recommendations...

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

Position Trade –

* June 3rd - Sell the Dow (big or mini) 118 put for 50 points or more

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 Recommendation

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

Position Trade –

Flat

Published on Fri, Jun 6 2008, 10:40 GMT

Wild Wall Street

Thu, Jun 5 2008, 12:13 GMT
by Carley Garner

Alaron

**I was recently interviewed by Stock Shotz!! Visit YouTube.com and search Carley Garner Stock Shotz to listen.

It seemed as if the market was inclined to end higher on the day…that is until the Fed Chair mentioned the word “inflation” in conjunction with the phrase “similar to the 70’s”. However, after a dramatic sell-off the market realized that it had overreacted to the statement and had completely discounted the overall theme of his speech which was that there are many more differences than similarities between the two.

Don’t forget that the employment report will be released on Friday morning, I recommend being on the sidelines for this one as it has been known to spark volatility. With that said, selling premium in the June options based on a dramatic move following the report may be an attractive strategy. Be sure to contact me during Friday’s session for ideas.

Of all of the major indices, it seems to be the Dow that is trading the weakest. Meanwhile, the Russell and the Nadaq are both outperforming. Keep in mind that it is often the small cap stocks that lead the market higher following an equity downturn. I am not saying that the absolute bottom is in but I do think that stocks will end 2008 well into positive territory.

The Dow is managing to hold the lows but we have yet to get filled on the short 118 put that I was recommending selling for 50 or better. I still like this trade, let’s try again tomorrow.

Sorry so brief!!

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

Dow Recommendations...

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

* June 3rd - Sell the Dow (big or mini) 118 put for 50 points or more

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 Recommendation

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

Position Trade –
Flat

Published on Thu, Jun 5 2008, 12:13 GMT

Stocks Suffer on Light Volume

Tue, Jun 3 2008, 12:37 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

It was a rough day for equity bulls, but I think that many saw this coming. Today’s weakness brought the Dow back to the lows of last week, while broader based indices such as the S&P have yet to reach those lows but seem to be well on the way. Perhaps the selling will subside from here, but I am counting on weaker prices as the week progresses.

Much of the selling was sparked by “shake-ups” at two major banks. The chief executive officer of Wachovia Corporation, Ken Thompson, was forced out of the firm. Thompson was the third CEO of a major U.S. financial institution to reach unemployment status following the credit crisis. Likewise, Kerry Killinger, was demoted as the chairman of Washington Mutual Inc.

Many investors were discouraged by the market’s failure to break resistance on the recent recovery from the lows. Richard Sparks, senior equity analyst at Schaeffer’s Investment Research in Cincinatti points out that that the S&P has had difficulty breaking through 1400 on the upside. Regarding today’s action he said, “There’s just no big catalyst on the horizon to get the market up and over that hurdle…It seems to me like one of those dreary Mondays without any positive news out there.”

Given the lack of economic news, crude oil was likely in the forefront in the minds of investors. Rumors of a soon to be U.S. attack of Iran, crude oil forged a reversal which resulted in a rally of over $4 per barrel from the early low.

Today’s trade may have been just what the bears needed to take control of this market in the near term. I suspect that we may have another day or two of backing and filling. Depending on volatility levels, it may be an opportunity to sell put options against a down-move.

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

Dow Recommendations...

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

Position Trade –

* May 29th – We may have missed this trade, but will continue to try if we see a sell-off soon.

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 Recommendation

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

Position Trade –

Flat

Published on Tue, Jun 3 2008, 12:37 GMT

Stocks Higher, but Resistance Looms

Fri, May 30 2008, 10:43 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

Equities enjoyed another day of gains following a decent showing in the preliminary GDP numbers, crumbling crude oil prices and smashed bonds. Keep in mind that the volume has been incredibly light and according to DT Trading on the S&P floor the lack of volume seems to support the upside drift.

According to the Commerce Department, the economy grew at an annual rate of .9%, above consensus estimates of .6% and the fourth quarter reading. The news is somewhat promising in that the U.S. economy may be able to avoid a full blown recession, or at least see a soft landing. I can’t stress enough that the economy and the stock market aren’t necessarily correlated. Remember, the stock market has always ended a recession higher than it began.

At this juncture it is difficult to pick a direction. The broader S&P index has rallied above and beyond its 20 day moving average but the Dow failed to reach it at 12,795. However, the difficulty of the market to hold early gains tells me that Friday may be a down day. Perhaps the so called mutual fund buying has exhausted itself and we are in store for a move to 12,420. I am indifferent to the direction from here and am awaiting an opportunity to trade.

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

Dow Recommendations...

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

Position Trade –

* May 29th – We may have missed this trade, but will continue to try if we see a sell-off soon.

May 19th – If you followed my recommendation you would have sold the Dow 135 call today for 50 or better (this can be done with the mini contract).

* May 20th – Buy this option back for 10 ticks or better to take a quick profit.
o May 21st – You should have been filled today at 10 points, this is a profit of $200 on the mini and $400 on the full sized contract before commissions and fees!!

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 Recommendation

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

Position Trade –

May 15 – Had you followed my recommendation you would be short a mini future from 2035…no stops recommended for now. So far so good...call me for guidance.

* May 20 – You may have opted to liquidate this position on the spike low today, but if you are still in put a limit order to take a profit at 1977 and a stop order at 2016 to lock in a profit.
o May 21st – If you placed a stop at 2016 you would have been liquidated before the drop. Depressing, but still profitable by about $380 before commissions and fees!!

Published on Fri, May 30 2008, 10:43 GMT

Crude Oil Trumps Durable Goods

Thu, May 29 2008, 14:50 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

The major stock indices failed to hold early morning gains following a reversal in crude oil. Crude prices entered the day in a tailspin, but quickly found buying interest after reaching a low of just under $126 per barrel. Speculators bid the price of crude nearly $6 off of the low.

Economic news has been relatively positive in recent days but equities haven’t really been able to benefit. Today’s early morning rally was cut short despite a good reading on durable goods. Orders to U.S. factories for big-ticket items excluding autos and airplanes increased by 2.5%; this was the largest gain in nine months. Some economists claim that the momentum in manufacturing may be crucial in avoiding a full blown recession. According to Joal Naroff, chief economist at Naroff EconomicAdvisors, “The economy is soft, but with demand for big-ticket items holding in there, a sharp slowdown does not seem to be in the works.”

The downside may not be over; I still like selling puts against additional weakness. With that said, there seems to be a little too much bearish sentiment surrounding stocks for the market to completely break down but anything is possible. It seems to me that we are destined for a retest of the Friday low. If I am right, the 11,700 seem attractive if you can sell them at or near 50 points.

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

Dow Recommendations...

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

Position Trade –

May 27th - I am recommending that my clients work orders to sell June Dow 117 puts for 50 points or better. This can be done with either a mini or full sized contract. Contact me if you have questions.
May 19th – If you followed my recommendation you would have sold the Dow 135 call today for 50 or better (this can be done with the mini contract).

· May 20th – Buy this option back for 10 ticks or better to take a quick profit.
o May 21st – You should have been filled today at 10 points, this is a profit of $200 on the mini and $400 on the full sized contract before commissions and fees!!

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 Recommendation

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

Position Trade –

May 15 – Had you followed my recommendation you would be short a mini future from 2035…no stops recommended for now. So far so good...call me for guidance.

· May 20 – You may have opted to liquidate this position on the spike low today, but if you are still in put a limit order to take a profit at 1977 and a stop order at 2016 to lock in a profit.
o May 21st – If you placed a stop at 2016 you would have been liquidated before the drop. Depressing, but still profitable by about $380 before commissions and fees!!

Published on Thu, May 29 2008, 14:50 GMT

Equities Run, but will it Last?

Wed, May 28 2008, 07:25 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

Stock investors found a reason to buy, or at least traders found a reason to cover short positions. The Dow managed an impressive rally on crumbling crude oil prices and a glimmer of hope in the housing market.

Crude oil dropped to settle near an eight day low, off nearly $4 per barrel on the day. While it is still too early to call a top in crude oil, there are a few things supporting the theory. The seasonality of this market tends to support lower prices from this point on. According to my research, it seems as though crude futures tend to find a top near the end of May to beginning of June. Additionally, energy prices have a habit of ending a long run with a “blow off top”. The $3 plus one day rally last week may have been a textbook example. If that was in fact the seasonal high in crude oil prices, stocks may begin to look attractive once again.

According to the Commerce Department, sales of new homes rose 3.3% in April. This was welcomed following a March plunge of 11%. The previous month’s reading brought new home sales to their slowest pace seen since 1991.

The Dow’s advance seems to simply be an oversold bounce at this point; tomorrow’s trade may be more telling. The Dow lost nearly 4% last week and was the worst showing since February. I see major resistance near 12,825 and support sits at 12,458.

Following the recent drop, I am growing bullish once again but recognize that we may be in store for an increase in volatility. I am recommending that my clients work orders to sell June Dow 117 puts for 50 points or better. This can be done with either a mini or full sized contract.

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

Dow Recommendations...

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

Position Trade –

* May 20th – Buy this option back for 10 ticks or better to take a quick profit.
o May 21st – You should have been filled today at 10 points, this is a profit of $200 on the mini and $400 on the full sized contract before commissions and fees!!

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 Recommendation

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

Position Trade –

May 15 – Had you followed my recommendation you would be short a mini future from 2035…no stops recommended for now. So far so good...call me for guidance.

* May 20 – You may have opted to liquidate this position on the spike low today, but if you are still in put a limit order to take a profit at 1977 and a stop order at 2016 to lock in a profit.
o May 21st – If you placed a stop at 2016 you would have been liquidated before the drop. Depressing, but still profitable by about $380 before commissions and fees!!

Published on Wed, May 28 2008, 07:25 GMT

Dead Cat?

Fri, May 23 2008, 09:58 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

All of the major indices showed signs of life on Thursday following the two day blood-bath on Wall Street. Lower crude oil and a drop in unemployment claims aided the effort for higher equities, yet today’s gains were relatively meager.

Keep in mind (as if you had forgotten) that we are approaching a three day weekend. Many traders likely began their holiday mid-day on Thursday and won’t be making their way back into the markets until the latter part of next week. The resulting light volume may mean an increase in volatility or it may create the opposite scenario, however it is important that you realize that it will have an impact and you should trade accordingly.

Crude oil continues to attract most of the attention. “People are concerned about the economy and what’s happening with oil,” noted Scott Fullman, director of derivatives investment strategy for WJB Capital Group. He added, “While the market is higher today we’re not seeing overall broad buying and we’re not seeing a lot of volume.”

I have to give credit to the analyst team at dow-trading, the dot com signal provider that I often speak to in regards to the markets. They were extremely bearish the Dow above 13,000 and their speculations were accurate. They continue to look for lower prices for U.S. stocks. On the contrary, DT Trading in the S&P pit, note heavy support in the S&P and are looking for a buying opportunity.

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

Dow Recommendations...

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

Position Trade –

May 19th – If you followed my recommendation you would have sold the Dow 135 call today for 50 or better (this can be done with the mini contract).

· May 20th – Buy this option back for 10 ticks or better to take a quick profit.
o May 21st – You should have been filled today at 10 points, this is a profit of $200 on the mini and $400 on the full sized contract before commissions and fees!!

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 Recommendation

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

Position Trade –

May 15 – Had you followed my recommendation you would be short a mini future from 2035…no stops recommended for now. So far so good...call me for guidance.

· May 20 – You may have opted to liquidate this position on the spike low today, but if you are still in put a limit order to take a profit at 1977 and a stop order at 2016 to lock in a profit.
o May 21st – If you placed a stop at 2016 you would have been liquidated before the drop. Depressing, but still profitable by about $380 before commissions and fees!!

Published on Fri, May 23 2008, 09:58 GMT

Rough Day at the Office for the Bulls

Thu, May 22 2008, 12:07 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

A crude oil rally enticed profit taking in equities but it was the FOMC minutes that broke the back of the market later in the day. This marks two consecutive massive losing days for the Dow and has definitely taken the wind out of the sails of many bulls. Despite the carnage, the uptrend remains in tact for now.

At the time of this report, crude oil futures were continuing to make new highs and break records in the aftermarket. The July contract traded above $134 to post a gain of $5 per barrel on the day. I have always said that crude needed a blow off top in order to exhaust the rally and I think that we may be seeing it. Additionally, one of my favorite barometers of a market top is a sudden influx of phone calls and “walk-ins” looking to get into a market that has already had a tremendous rally. Several never before commodity traders seem to be rushing to open an account and spend absorbent amounts of money on crude oil calls…I think the top is near.

It was a day of mixed emotions for me. If you follow this newsletter you know that we recommended to sell calls against the rally on Monday and were happy to be able to buy them back at a healthy profit today. I had also recommended shorting the Nasdaq at 2035 which turned out to be a beautiful entry point. Unfortunately, despite my better judgment and pledges to never do it again I published the stop order. Miraculously, the market rallied nearly 15 points on the open to hit the stop price only to turn around on a dime and end the day much (much) lower. I am not bitter; this is the risk we take in trading but my clients cannot afford for me to publish stops on this report as it seems to have an adverse effect on their trading accounts.

I would like to begin looking for short puts…but there may be some room on the downside so I will be patient.

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

Dow Recommendations...

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

Position Trade –
May 19th – If you followed my recommendation you would have sold the Dow 135 call today for 50 or better (this can be done with the mini contract).

· May 20th – Buy this option back for 10 ticks or better to take a quick profit.
* o May 21st – You should have been filled today at 10 points, this is a profit of $200 on the mini and $400 on the full sized contract before commissions and fees!!

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 Recommendation

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

Position Trade –
May 15 – Had you followed my recommendation you would be short a mini future from 2035…no stops recommended for now. So far so good...call me for guidance.

· May 20 – You may have opted to liquidate this position on the spike low today, but if you are still in put a limit order to take a profit at 1977 and a stop order at 2016 to lock in a profit.
* o May 21st – If you placed a stop at 2016 you would have been liquidated before the drop. Depressing, but still profitable by about $380 before commissions and fees!!

Published on Thu, May 22 2008, 12:07 GMT

Equities Give Back...Gains that is

Wed, May 21 2008, 10:56 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

Stocks suffered at the hands of skyrocketing crude oil prices and an inflationary reading on the PPI report. Crude oil spiked to a new record high above $129 per barrel after OPEC’s president was quoted as saying that his organization will not increase output prior to the September cartel meeting. Adding fuel to the fire (no pun intended), Boone Pickens was a guest on CNBC this morning claiming that $150 this year was likely. He also added that current prices aren’t the result of a lower dollar or even speculators but simple supply and demand fundamentals.

Some analysts are beginning to wonder if the subprime debacle should be put on the back burner and energy and inflation concerns should be brought to the forefront. Stephen Leeb of Leeb Capital Managent now sees escalating crude oil prices as the market’s biggest worry. He stated, “Stock investors are watching oil, period.” And later added, “The events that moved the market before revolved around write-offs and foreclosures, but all that’s changed.”

According to the Labor Department, the PPI indicated that higher energy and food prices are migrating into other aspects of the economy. The core PPI rose by a faster than expected .4%, double consensus estimates, while the headline number increased by .2%.

I have been looking for a correction, and it seems as though it is here. I believe that there is still some room for prices to move on the downside. Support in the Dow can now be found at 12,718 and in the Nasdaq at 1979.

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

Dow Recommendations...

* May 20th – Buy this option back for 10 ticks or better to take a quick prof

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 Recommendation

* May 20 – You may have opted to liquidate this position on the spike low today, but if you are still in put a limit order to take a profit at 1977 and a stop order at 2016 to lock in a profit.

Published on Wed, May 21 2008, 10:56 GMT

Mixed Bag in Equities

Mon, May 19 2008, 14:07 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

It was an overall bearish day for stock trade, but the selling pressure was muted and that may signal that there is still some room for this market to move on the upside. The catalyst to early morning selling pressure was a staggering rally in the crude pit.

I think that most agree that crude prices have taken on a life of their own. Supply and demand fundamentals don’t seems to necessarily matter as speculation has created a “fear” premium in current pricing. Whether or not that premium can be justified is debatable and irrelevant, but in the meantime the economy can and likely will suffer greatly from the implications. The front month futures contract rallied to $127.82 to post yet another record high. Let’s face it, this can’t go on forever but unfortunately it could extend beyond what a year ago would be our wildest dreams. Estimates as to the where the high will come in range from $140 to $200.

Today’s mixed news leaves investors with a lot of uncertainty. Steve Neimeth, portfolio manager for AIG SunAmerica Mutual Funds believes that the energy rally has drained some of the market optimism. “Although the housing numbers today were generally positive, the Michigan survey was quite poor and, more importantly, a continued spike in energy and commodities are causing investors to second-guess the second-half recovery.” He added, “If oil and gas prices continue to go up, consumers are unlikely to have the spending ability in the second half.”

The major indices look to have begun to overextend themselves; the dow-trading team, a dot com signal provider, is often bearish and this isn’t an exception. Although they are mechanical day traders and have recently undertaken a completely automated trading strategy, they are known for having strong fundamental opinions in regards to the U.S. economy and the markets. They point to heavy resistance at 13,000 and see support at 12,650. Their pessimism stems from a belief that the market has surpassed fundamentals and the Fed will likely be ending their rate cut campaign.

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

Dow Recommendations...

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

Position Trade – Sell 1 Dow 135 call for 50 or better (this can be done with the mini contract)

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 Recommendation

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

Position Trade –

May 15 – Had you followed my recommendation you would be short a mini future from 2035…no stops recommended for now.

Published on Mon, May 19 2008, 14:07 GMT

Indices Steadily Quiet

Wed, May 14 2008, 10:35 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

Investors continue to be sensitive in regards to inflation but the major indices managed to maintain composure. Bernanke delivered a speech at a Fed conference in Atlanta. According to the Fed Chair, turmoil in the financial markets has been eased “somewhat”, although he added that the situation is still “far from normal”.

Despite his comments being overall positive, there are many dissenting opinions as to the health of the economy and claim that the statements weren’t enough to improve equity market conditions. Brian Gendreau, investment strategist for ING investment Management, claims that investors won’t get a clear picture until more economic data is released in the upcoming months. Gendreau stated, “We’re going to go through a period where the markets are going to focus on the macro-data, and any adverse piece of news about the credit markets.” He added, “It will be a trendless market until the uncertainties about a contraction in economic activity are resolved.”

On a bright note, last month’s retail sales data beat expectations. Given that consumer spending is the lifeline of the economy; this is a glimpse of hope. Additionally, Wal-Mart Stores Inc. warned that second quarter earnings may be below original forecasts. While this is bad news for the retail giant, it may actually be slightly positive in terms of measuring the health of the economy. Discount retailers such as Wal-Mart typically thrive in poor economic environments. If consumers haven’t felt the need to “downsize” their shopping to discount, maybe they aren’t hurting as badly as many may think. I am not putting down the idea of shopping at Wal-Mart. It is my store of choice and would likely be even if I hit the lottery. Why pay more? (No they did not pay me for this plug).

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

Dow 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 Recommendation

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

Position Trade – Flat

Published on Wed, May 14 2008, 10:35 GMT

Bull Trap?

Mon, May 5 2008, 10:20 GMT
by Carley Garner

Alaron

Ahead of the Fed announcement it was slow going in terms of volume the direction was decisively positive. The Dow enjoyed a triple digit rally on a slightly positive GDP report and likely some short covering ahead of the excitement. I was encouraging many of my clients to be flat going into today and was likely not alone. The order flow was nearly non-existent. In fact, an hour before the Fed’s interest rate decision it was said that the S&P pit had 30 to 40 locals standing in it.

Many traders simply weren’t willing to hold positions into what may or may not have turned into excessive volatility. We have all come to know that sometimes major economic releases or announcements turn out to be a non-event and other times they can be unbelievably volatile but unfortunately you don’t know which is which until after the fact. A wise trader once said that you should trade leading up to the event but not during or immediately after. In this case, the Fed lowered rates by a quarter of a point and equities traded firmer but with relatively muted volatility (relative to some of the craziness we have seen) but weren’t able to hold gains going into the close.

The U.S. economy great at a rate of .6% in the first quarter to beat analyst estimates. Housing and credit problems are likely to blame for the dismal performance but many are relieved that the numbers didn’t suggest contraction. We are certainly in a rut, but have yet to conform to the textbook definition of a recession. Perhaps we will squeak by or perhaps this is only the beginning. One thing is for sure, the stock market is usually trading higher at the end of a recession than it started.

“The economy is weak but not collapsing” said Lynn Reaser, chief economist at Bank of America’s Investment Strategies Group. “A recession can’t be ruled out, although the starts are not lined up at this point to definitively say one way or the other.”

The team at dow-trading, an online trade signal provider, has a very different outlook on the economy and the market. They are looking at the recent rally as a great opportunity to get short the market either by selling futures or selling calls. However, they note that their services primarily involve automated day trading and are technical in nature rather than fundamental. They have contributed a chart to support their assumptions, see below.

Domestic equities have come to a fork in the road. Today’s trade may have been a bull trap or it may be the beginning of the 2008 rally that we have been looking for. My guess is that this was simply an opportunity for stop running and we will head lower from here.

I will be out of the office (and on a beach in Hawaii) from Wednesday April 30th through Tuesday May 6th. I will be available by email; however, should you have any urgent matters, feel free to contact my partner Paul Brittain or Robert Firestone by dialing 1-800-935-6492.

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

Dow Recommendations...

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

Position Trade – Flat

April 18th – My clients were advised to sell May Dow 133 calls for 50 or better (this can be done with the mini options or the full sized).

– Place an order to buy this back for 15 or better

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 Recommendation

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

Position Trade – Flat

Published on Mon, May 5 2008, 10:20 GMT

Stocks Enjoy a Rally, but will it Last?

Fri, Apr 25 2008, 12:20 GMT
by Carley Garner

Alaron

**Be sure to see my monthly column “Futures for You” in Stocks and Commodities!!!

The major indices experienced large intraday swings but the bias was decidedly to the upside. Light volume, stop running and technical buy programs were said to be the fuel behind the mid-day rally. Interestingly enough, the day’s economic news was mixed and so were the earnings reports. However, a good day for the greenback and a poor showing in the commodity markets looked to be equity supportive.

According to the government, reported sales of new homes fell to the lowest level since 1991. The decline comes as no surprise, but the magnitude was a bit startling. If you are in the market for a new home, it may be time to begin shopping…I know that I am. With any market, picking a bottom is impossible unless you are lucky.

Despite the doomsday’ers on TV and in newspapers, there are some that believe that the fundamental nightmares that the U.S. economy has faced over the past several months hasn’t been the crippling blow than many had thought that it may be. “The earnings picture is not so bleak as people thought it was going to be,” noted John Merrill, chief investment officer at Tanglewood Capital Management in Houston. He added that “There’s been so much talk of the spillover from the credit crunch and homebuilding into the real economy and that just doesn’t seem to have happened.”

In yesterday’s report I noted that the Dow may see 12,930 by the end of the week, and things progressed a little faster than I had originally expected but today’s high certainly met my target. I also mentioned that if we did rally to such levels, I didn’t expect that it would last long. If I am right, the market should drift lower to 12,676 and potentially 12,610.

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

Dow Recommendations...

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

Position Trade –

April 18th – My clients were advised to sell May Dow 133 calls for 50 or better (this can be done with the mini options or the full sized).

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 Recommendation

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

Position Trade – Flat

Published on Fri, Apr 25 2008, 12:20 GMT

Stocks Rally Despite Bears

Fri, Apr 18 2008, 10:31 GMT
by Carley Garner

Alaron

**Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

Although equities traded in red territory much of the day, the action was somewhat impressive given yesterday’s seemingly out of control rally and today’s less than impressive earnings and economic news. Picking a direction is tough, but my “gut” tells me that we are going to see the top of the range before we see the bottom. Will this be the breakout or another failed attempt?

Merrill Lynch posts a first quarter loss for the third consecutive quarter. Additionally, the world’s largest brokerage reported that they would be cutting another 3,000 jobs on the heels of another $6.5 billion in fresh write-downs. John Thain, the firms newly hired CEO warns that things were unlikely to improve in the next couple of quarters.

“This was about as difficult a quarter as I have seen in my 30 years on Wall Street,” according to Thain. “We are planning for a slower and more difficult next couple of months and probably next couple of quarters, but are also hopeful for our full year 2008 results.”

This month’s Philly Fed triggered market jitters, but wasn’t enough to knock the bulls off track. The index was reported at a negative 24.9, however; most manufacturing executives were “cautiously optimistic”.

The market hasn’t had much luck in holding gains before a weekend. While from a charting standpoint 12,782 looks to be the next target for the Dow, option expiration and the Friday plague may prevent that from happening.

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

Dow 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 Recommendation

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

Position Trade – Flat

Published on Fri, Apr 18 2008, 10:31 GMT

Earnings Trump 'Blue Book' and Housing Starts

Thu, Apr 17 2008, 08:16 GMT
by Carley Garner

Alaron

**Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

Stocks surprised many with a sharp rally into seemingly negative news. Following yesterday’s close, I was of the opinion that we were due for a small market bounce before resuming the down-trend. Today I am rethinking my assessment and am content to recommend clients to be on the sidelines (sorry to be such a bore but if your goal is to make money this is the best position to be in). Only time will tell if this rally is substantial, or simply a by-product of option expiration. Also leaving me somewhat hesitant to jump on the band-wagon is the idea that the equity market often suffers greatly in the week following the tax-deadline.

Poor housing starts, a Beige Book that should be renamed the “Blue Book” and unruly energy prices all seemed to be overshadowed by positive earnings. Positive numbers from firms such as Intel, JP Morgan and Coca Cola were able to trigger equity buying in the midst of what the bears may have believed was the “perfect storm” of negativity.

“You have a combination of JPMorgan and all these other strong earnings out there from a broad range of sectors, and that’s helping the buying we’re seeing,” said Todd Salamone the director of trading and vice president of research at Schaeffer’s Investment Research. He added, “There’s an unwinding of all the negativity that we saw ahead of the earnings season.”

Today’s close above 12,456 suggests that the June Dow is poised to move higher to 12,771….but I wouldn’t be willing to put my money where my mouth is. I do believe that we are in the vicinity of what 6 months from now will be looked at as a major low, but I am not convinced that the worst is over just yet.

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

Dow 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 Recommendation

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

Position Trade – Flat

Published on Thu, Apr 17 2008, 08:16 GMT

Stocks Mostly Unch'ed

Thu, Apr 17 2008, 07:44 GMT
by Carley Garner

Alaron

**Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

Equity traders were caught off-guard with a hotter than expected PPI reading, but seem to be waiting for tomorrows CPI in order to determine whether the price pressure has trickled down to the consumer. After what seemed to be a short covering rally following the announcement stocks fell into negative territory.

According to the Labor Department, wholesale prices increased by a whopping 1.1% last month. The reading was well below the November reading of 2.6% (the highest jump in 33 years) but was the largest increase since.

For once, a merger and acquisition deal between Delta and Northwest wasn’t able to trigger an equity rally. Investors weren’t happy with the specifics of the deal and there are speculations on whether the cost savings and revenue benefits will be as attractive as what was originally expected. Perhaps Wall Street’s lack of enthusiasm has to do with the political and antitrust hurdles.

Also keeping a dark cloud over the market, crude oil futures rallied to new all time highs. The May contract nearly reached $114 per barrel leaving many wondering if we will ever see a break and again. As energy prices come back into the headlines it may begin wearing on already pessimistic views of the economy and corporate growth. If we are lucky, the seasonal tendency for the energies to find a top in mid-May will hold true. Until then, I believe that the major stock indices are destined for a retest of the January lows.

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

Dow 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 Recommendation

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

Position Trade – Flat

Published on Thu, Apr 17 2008, 07:44 GMT

Earnings Season Plagues the Market

Thu, Apr 10 2008, 14:33 GMT
by Carley Garner

Alaron

**Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

Equities retraced gains on new record highs in crude oil, an early morning UPS earnings warning and technical profit taking. According to the “boys” on the trading floor, retail order flow was light and locals were given the opportunity to press sell stop orders.

Higher fuel costs and a weakened economy forced UPS, the world’s largest shipping carrier to trim forecasted earnings. This, combined with less than stellar earnings reports, have triggered a bit of profit taking or portfolio shifting to a less aggressive mix between stocks and bonds.

Despite the weakness, the last few days haven’t been the disaster that they could have been. Jo Kinahan, chief derivatives strategist for Thinkorswim Group believes that the recent calmness in equities has been impressive. “It’s the first week we have had in a while where stocks are trading on their own merit. That’s why we’re trading on oil”. He added, “It’s amazing how well the market has held in there with three days of not good news.”

Earnings seasons have plagued this market for quite some time, and this time appears to be no exception. The near-term direction seems to be lower for now. The June Dow contract should find a band of support from 12,378 to about 12,330 but the Nasdaq may find support at 1799.

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

Dow Recommendations...

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

Position Trade –

* April 1 – Sell 1 April Dow 130 call for $600 or better (this can be done in the mini instead for $300!)
* April 7 – Place an order to buy this back for 15 ticks or better. o April 9 – This would have been filled today for a profit of $450 on the full sized contract options before transaction costs and $225 on the mini options before transaction costs.

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 Recommendation

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

Position Trade – Flat

Published on Thu, Apr 10 2008, 14:33 GMT

Early Rally Fizzles Ahead of Earnings

Tue, Apr 8 2008, 14:41 GMT
by Carley Garner

Alaron

**Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

An early morning rally on Wall Street fizzled as the day progressed. With most of the major indices at or near major resistance levels, investors may have been playing it “safe” by taking some risk off of the table ahead of the earnings season. Alcoa Inc. is set to issue results after the bell to kick things off.

Ryan Detrick, senior technical strategist at Schaeffer’s Investment Research, noted that “When the market closes, first quarter earnings kick up – it looks like people are taking money off the table ahead of those.”

Much of the early morning buying is said to have been triggered by corporate deal making, specifically a private equity investment in Washington Mutual Inc. As a result, the banking stocks which have been the brunt of the bears selling enjoyed a relatively positive day.

Remember, the market tends to rally ahead of earnings then correct as they are reported simply because it is difficult to meet the expectations of many investors. Even if Wall Street earnings targets are met, it may not be enough to fend off profit taking.

While the Dow may be at or near a temporary ceiling, a spike to 12,832 is possible depending on tomorrows FOMC minutes, next week’s economic data and the upcoming earnings season. The Nasdaq may see levels as high as 2000.

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

Dow Recommendations...

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

Position Trade –

April 1 – Sell 1 April Dow 130 call for $600 or better (this can be done in the mini instead for $300!)
· April 7 – Place an order to buy this back for 15 ticks or better.

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 Recommendation

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

Position Trade – Flat

Published on Tue, Apr 8 2008, 14:41 GMT

Stocks Mixed ahead of Jobs Data

Fri, Apr 4 2008, 12:07 GMT
by Carley Garner

Alaron

**Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

After a weak open, stocks made their way higher on Bernanke testimony a positive ISM number and anticipation of tomorrow’s employment report. It seemed as though the markets were reluctant to make any major moves ahead of the jobs data due tomorrow morning.

Fed chair Bernanke was left to defend the Fed’s actions in bailing out Bear Stearns. In the face of criticism Bernanke assured the Senate Banking Committee, “Given the exceptional pressures on the global economy and financial system, the damage caused by a default by Bear Stearns could have been severe and extremely difficult to contain.”

The Dow will likely have a difficult time making its way above a band of resistance from 12,700 and 12,800, but it may be tomorrow that makes or breaks the market. Analyst estimates for the non-farm payrolls is modest at best. Most are looking for a draw of a bout fifty thousand jobs making the target extremely attainable and keeping the odds in favor of a knee-jerk reaction to the upside for the major stock indices. The question will be whether or not the Dow will hold onto gains going into the weekend.

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

Dow Recommendations...

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

Position Trade –

April 1 – Sell 1 April Dow 130 call for $600 or better (this can be done in the mini instead for $300!)

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 Recommendation

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

Position Trade – Flat

Published on Fri, Apr 4 2008, 12:07 GMT

Stocks Mixed and Awaiting Payroll Data

Thu, Apr 3 2008, 10:46 GMT
by Carley Garner

Alaron

*Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

Sideways to lower was the theme on Wall Street for a majority of the session, but following yesterday’s gangbuster rally the bulls are likely content. After several early morning attempts at a rally, Dow futures simply failed to break through the ceiling just under 12,700.

Federal Reserve Chairman Ben Bernanke described the current a economy as one in which a recession is possible and policy makers are “fighting against the wind” in attempts to instill stabilization. Specifically, Bernanke stated that “It now appears likely that the gross domestic product will not grow much, if at all, over the first half of 2008 and could even contract slightly.” However, as expected he gave little insight into whether or not further rate cuts are planned. Some economists and the Fed Funds futures traded on the CBOT, on the other hand; now suggest that a quarter of a point in April may conclude the rate cut campaign.

The Dow found resistance and held, but the selling was relatively moderate. It is highly likely that we won’t see any significant moves until post non-farm payrolls (Friday 8:30 am Eastern). 12,700 is significant in many ways. First of all, it is approximately two standard deviations from the 20 day simple moving average. Second, it is the 20 week simple moving average. In order for this market to have a chance at making progress from here we will need a solid close above this level. The Nasdaq should have a difficult time breaking 1185 for now, look for a retracement from there.

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

Dow Recommendations...

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

Position Trade –

April 1 – Sell 1 April Dow 130 call for $600 or better (this can be done in the mini instead for $300!)

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 Recommendation

**There is unlimited risk in naked option selling and futures trading
Position Trade – Flat

Published on Thu, Apr 3 2008, 10:46 GMT

Stocks Rocket Higher, but may run into Trouble

Wed, Apr 2 2008, 14:33 GMT
by Carley Garner

Alaron

**Read my article “Tips and Tricks” in this month’s bonus issue of Stocks and Commodities!!!

Stocks soared on UBS and Lehman Brothers news, better than expected economic date, but most of all second quarter and beginning of the month fund buying. The major indices were sharply higher in the overnight session and had very little to slow them down as the day wore on.

Both Lehman Brothers Holdings Inc. and UBS AG issued shares to improve their balance sheets. The market took it as a sign of better things to come in the financial stocks as well as a possible sign that the worst of the credit crisis is behind us. Whether that is a correct assessment or not has yet to be seen, but there are certainly those with the opposite opinion. In fact, some of my contacts on the S&P floor seem to think that we are approaching a great selling opportunity. After all, we have seen similar “bear market rallies” thus far in 2008 and we all know how they have turned out. Until this market proves that it is ready to break out of the range, which I am convinced that it will eventually be on the upside, it doesn’t make sense to try to trade otherwise.

Today, I was recommending to my clients that they sell call options into this volatility but giving the market plenty of room to move, and more importantly room for us to be wrong without having to suffer financially (to a point). The April 130 calls for $600 or better seem to be a good play; this would have been filled today but should be possible tomorrow for a similar price.

Major resistance in the Dow can be found at 12,645 and again at 12,775. In the case of the Nasdaq, the market closed near heavy resistance at 1865 but may find a ceiling near 1885.

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

Dow Recommendations...

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

Position Trade –

April 1 – Sell 1 April Dow 130 call for $600 or better (this can be done in the mini instead!)

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 Recommendation

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

Position Trade – Flat

Published on Wed, Apr 2 2008, 14:33 GMT

Not again...

Thu, Mar 20 2008, 16:10 GMT
by Carley Garner

Alaron

**Email me for a free copy of my article in Pitnews.com Magazine “When the Music Stops”

Equities struggled to hold all of the gains posted yesterday, but it wasn’t a complete disaster. On the other hand, this all seems a bit too familiar. The last time that we saw a sharp rally in the Dow, the market sharply reversed to retest the January lows. Picking a direction at this juncture is tough. In my opinion, the bulls should avoid marrying any position and the bears should do the same. Sentiment and conditions can change in the blink of an eye and as traders we must be willing to put personal opinions aside and attempt to go “along for the ride”.

Unfortunately, the markets are in a rut. Each and every rally is met with speculative selling and liquidation of investors that are clamoring for the sidelines. The risk is high and so are the nerves. It may take confirmation of the Fed’s actions in order to turn things around, but with that said I believe that despite the questionable start to the year Wall Street will be on strong footing by the year’s end. After all, it is an election year and it hasn’t paid to bet against the market on an election year.

Morgan Stanley reported better than expected earnings, putting them in the column with Lehman Brothers and Goldman Sachs instead of on the other side with Bear Stearns.

I am confused and not afraid to admit it, but I am not alone. “Nobody wants to make the first move; there is liquidity on the sidelines. It doesn’t really know what to do right now,” said George Shipp, che3if investment officer at Scott & Stringfellow. He added, “Clearly; there is fear. I would say the needle is pointing more toward fear than greed right now.”

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

Dow Recommendations...

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

Position Trade –

March 14 – Sell the April Dow 10,900 put for $1000 or better. Remember, this trades against the June futures. The Reverse Break Even on this trade is 10,800, in other words it is profitable at expiration from 10,800 and higher. Keep in mind that the risk is unlimited below this level.
March 7 – The market is a bit overbought. Look to sell the March Dow 114 put for $700 or better. This would have been filled on Friday, and you may be able to get a little more for it on Monday.

February 11 -. As an option seller, time works for you rather than against you so if you are willing to accept the risk, there is a lot of premium on the put side of this market. There may be some additional weakness, so I like trying to sell the March 113’s for $1500.

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

February 4 - Volatility remains high. This creates opportunities for traders to sell options for premium collection or in conjunction with a spread (combination of long and short options). Similar to the 1 by 2 put spread recommended below, you may be able to do a ratio call write using the 12,800 call and the 13,100 calls. This spread should be executed near even money. This simply means that you will be bringing in as much premium on the short options as you pay out on the long options. The risk is unlimited above 13,400 and will see its maximum profit of $3000 (assuming you are filled at even money) at expiration if the underlying market is trading at 13,100. Keep in mind that this trade pays out something anywhere from 12,800 to 13,400 and has no risk exposure beyond transaction costs and the cost of the spread (if any) below 12,800. Call me for help!!

January 14 – With the volatility up, so is the premium. Based on values seen at the end of the trading day, it is possible to buy a March 12,600 put and sell 2 of the 12,100 puts for a net credit of about $350 to $400 before commissions and fees. I am not a bear here, but this seems like the thing to do. The trade makes money intrinsically from 126 to 116, the max profit on the trade occurs at 121 and is in the amount of $5000 + the premium collected – transaction costs. The only way that this trade loses at expiration is if the market drops below the break even point of just under 116. Of course, the risk is unlimited under 116.

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Thu, Mar 20 2008, 16:10 GMT

75 Basis Points....Please

Tue, Mar 18 2008, 14:54 GMT
by Carley Garner

Alaron

**Email me for a free copy of my article in Pitnews.com Magazine “When the Music Stops”

It was a rough day for stocks, but given the circumstances things could have been much worse. Many of us went to bed last night wondering if there would even be a market to wake up to. Luckily, panic over Bear Stearns was subdued a bit thanks to the Fed’s surprise cut at the discount window.

Last night’s announcement by the Fed was extremely rare in terms of timing and allows the central bank to act as the lender of last resort for investment firms. These firms can now look to the Fed to secure short-term emergency loans beginning on Monday. In other words, the Fed is in essence “guaranteeing” your deposits on Wall Street aside from your trading losses of course.

President Bush made an attempt to sooth the nerves of investors by offering supportive comments regarding the Fed’s actions; “We’ve taken strong decisive action,” he added “We’re in challenging times.” Bernanke defended his work as well, “These steps will provide financial institutions with greater assurance of access to funds.”

Overshadowing the Fed’s move, JP Morgan purchased Bear Stearns in a deal backed by the government. Failure to aid JP Morgan in the buyout may have lead to sever panic as investors clamored to pull funds from the nearly insolvent firm. However, the move outlines the severity of the situation.

Investors are looking forward to the FOMC meeting. Many on the trading floor claim that if it wasn’t for short covering ahead of the Fed, the equity markets would be much lower. In fact, some were looking for the June S&P to see 1250, then a sharp drop to 1200.

The market may not be happy with anything less than 75 basis points from the Fed, that is a tall order! I still like selling puts here, but I would do it on a strong down-move in order to capture as much extrinsic value as possible.

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

Dow Recommendations...

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

Position Trade –

March 7 – The market is a bit overbought. Look to sell the March Dow 114 put for $700 or better. This would have been filled on Friday, and you may be able to get a little more for it on Monday.

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Tue, Mar 18 2008, 14:54 GMT

Stocks Trade Wildly

Fri, Mar 14 2008, 15:45 GMT
by Carley Garner

Alaron

**Email me for a free copy of my article in Pitnews.com Magazine “When the Music Stops”

The stock market continues to see high levels of intraday volatility and this will likely be the case until the FOMC meeting next Tuesday. The Dow reversed course after being down in excess of 200 points and made it well into positive territory. The range from high to low was about 427 points, and likely caught a lot of traders off-guard.

Whether it was the PPT (plunge protection team), the announcement by Standard & Poor’s or a combination of both, it is obvious that there is some buying interest near the lows of this range. While I can’t rule out one more leg lower, I think that we will soon find a bottom.

The Nasdaq has been trading in a relatively narrow channel with lower levels of volatility relative to the Dow or the S&P. Tech stocks also seem to be in a slightly healthier position than the broad market. While I wouldn’t recommend buying at current levels, 11680 looks like a good entry.

Today marks the official roll-over. You should now begin trading the June futures contract and should be out of any March positions. Likewise, the March options will be tradable through Wednesday, but officially expire on Thursday along with the underlying futures contract. Let me remind you that in the case of quarterly options you should strongly consider offsetting any holdings by Wednesday. This is because although you can’t trade them on Thursday you are subject to any moves in the futures market that occur on the day of expiration. Trust me on this, it is much easier to bite the bullet and pay up for your short options than to get stuck with a cash settlement from the exchange. I have seen some pretty interesting settlements leaving retail traders with hefty losses on short options that they believed were expiring worthless.

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

Dow Recommendations...

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

Position Trade –

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

* January 15 – We were getting filled on this trade at a credit of $700

o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Fri, Mar 14 2008, 15:45 GMT

Stocks Digest Rally, but hold Composure

Thu, Mar 13 2008, 16:41 GMT
by Carley Garner

Alaron

**Email me for a free copy of my article in Pitnews.com Magazine “When the Music Stops”

Equities spent the day digesting yesterday’s unconscionable rally. The street seems to remain overall positive regarding the Federal Reserve efforts to pump liquidity into the struggling financial markets, but there are definitely arguments as to how effective their actions will be in the near-term. A dramatic rally in crude oil most likely capped any hopes of any immediate follow through to the upside.

The March Dow reached 12,310 before dropping sharply off of the highs. Coming into the day, heavy resistance was marked at 12,330 and failed to even test it. The failure of the market to hold gains this morning doesn’t support the bull camp, but the moderate selling doesn’t put the bears in control either. However, I certainly wouldn’t want to be long futures here. I prefer to exercise patience…a retest of the recent lows would likely be a great place to begin reconsidering selling put premium.

Not having a direct impact on the stock market, but is NYSE related, Elliot Spitzer resigned from office in shame. I have had the pleasure of enjoying a martini at the Mayflower in D.C., the alleged hotel in which all of this took place. I must say that it did seem to be a hot-bed of similar activities, there was no shortage of powerful politicians, money or booze. That can never be a good combination.

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

Dow Recommendations...

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

Position Trade –

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

* January 15 – We were getting filled on this trade at a credit of $700

o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Thu, Mar 13 2008, 16:41 GMT

Stocks Rocked Higher by Fed Announcement

Wed, Mar 12 2008, 14:28 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

Thanks to a Federal Reserve announcement, stocks surged nearly 3% on the day. This was the biggest one day gain since last November. Only time will tell if we have seen “the bottom” but the bears are likely to get nervous and short covering may dominate trade in the following days.

In a nutshell, the Fed agreed to work with central banks around the world in order to bring liquidity to the ailing credit market. The move avoids another dramatic interest rate cut, which is seen as inflationary. Obviously, this will also add pressure to prices but it is arguably under the radar.

“The big problem has been the financials, and this helps supply money directly to the banks and may take some of the need for aggressive rate cutting off the table,” according to the chief investment strategist at Meridian Equity Partners, Peter Dunay. “The Fed is basically going to take the bad loans off the banks’ books, and the market seems to be loving that idea.”

Others aren’t as optimistic. Peter Stuedemann, head analyst and trader for “dow-trading” a dot com signal provider believes that this emergency move just proves how bad things really are. He believes that today’s rally is simply a good chance for the bears to get repositioned on the short side. If you recall, he did declare 14,000 as a long term top late in last year.

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

Dow Recommendations...

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

Position Trade –

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Wed, Mar 12 2008, 14:28 GMT

Lower Equities on Crude Oil Rally

Tue, Mar 11 2008, 15:40 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

The bloodshed continues on Wall Street, but the selling seemed to be on light volume and stop running. This may indicate that a bottom will be found shortly, although it looks as though we are headed for the January lows before finding support.

Surging oil prices may have had something to do with the equity meltdown. The front-month contract in crude oil peaked at $108.21 during the session, and that is scary for anyone.

On top of rallying energy prices, there has been a steady stream of less than optimistic news. There really isn’t much in terms of economic releases until later in the week and traders will be heavily focused any hint as to what action the Fed may take in the March 18th FOMC meeting.

From a technical standpoint, the Dow is extremely oversold. Based on studies of standard deviations, 11,913 marked heavy support for the March Dow. This level is approximately 2 standard deviations from the mean, which means that statistically the Dow should bounce from here…even if it is just temporary.

However, there is a good chance that we will retest the January lows in the Dow roughly 300 points from where we are now.

According to the Stock Trader’s Almanac, today was a statistically a bullish day but we now know that it just wasn’t meant to be. Thursday, along with the first three days of next week are also believed to have a bullish tendency. In fact, the Monday before the March triple witching has been up in 15 of the last 20.

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

Dow Recommendations...

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

Position Trade –

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Tue, Mar 11 2008, 15:40 GMT

Equity Meltdown

Fri, Mar 7 2008, 15:57 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

It was a sluggish day in the stock trading arena ahead of tomorrow’s employment report. Negative news out of the housing market and concern over a sagging economy resulted in approximately a one percent decline in the major indices.

Historically, early in March has been positive for the markets but 2008 has failed to deliver. Although, in March of 2001 the Dow (cash index, not futures) was down about 1,469 points from the 9th through the 22nd according to the Stock Trader’s Almanac. The Almanac also notes that in recent years, the month of March has been “rather stormy” with wild fluctuations and large gains and losses. Another interesting conclusion, March is the worst month for the Nasdaq during election years posting an average drop of 2.5%.

According to the Federal Reserve, homeowner equity is dipping below the 50% mark for the first time on record since 1945. In other words, this is the first time since 1945 (when the Fed began tracking) that homeowner’s debt on their houses exceeded their equity.

Moody’s Economy.com estimates that 10.3% of homes will have zero or negative equity by the end of the month. This amounts to about 8.8 million homes. They also claim that if prices fall 20% from their peak, about 15.9% of homeowners will be upside down on their loans.

For the reasons outlined above, as well as many other contributing factors, investors and traders alike are thoroughly confused. At this juncture, I believe that being on the sidelines is the best position.

I still like the idea of selling puts into further weakness. Stay tuned…

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

Dow Recommendations...

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

Position Trade –

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

* January 15 – We were getting filled on this trade at a credit of $700 o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Fri, Mar 7 2008, 15:57 GMT

Wild ride for equity traders

Wed, Mar 5 2008, 15:09 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

Today’s stock market action left many wondering whether this was a “blow off bottom” or simply a late day short covering rally that will soon fizzle. The market seems comfortable within the trading range and it doesn’t seem rational to try to trade against it. However, the markets look weak and although I am entertaining the idea of a bounce to 12,383 it seems as though this market is destined for the January lows. In the March Dow that translates into just under 11,500, in the Nasdaq it is 1699.

Stocks have suffered at the hands of technical selling in the past several trading sessions. However, late today it is possible that equities were the beneficiary of technical buying. As the major indices approached major support, short covering began to take hold. Much of the buying seemed to be triggered by rumors of an Ambac bail out. Adding to the momentum, Dow Jones Newswires reported that Cisco CEO John Chambers claims that he is “even more comfortable” with the long-term growth targets.

“What we’re seeing is a very nervous market, and nervousness breeds volatility,” noted Anthony Conroy, managing director and head trader for BNY ConvergEx Group. Referring to constant worries about debt he added, “It took years to put this stuff on their books – it’s not going to come off quickly.”

I like the idea of selling puts into further weakness. Stay tuned…

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

Dow Recommendations...

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

Position Trade –

* You should be out of these by now with a nice profit, if not do so immediately. Call me for guidance.

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade – Flat

Published on Wed, Mar 5 2008, 15:09 GMT

Stocks mixed on bad data but encouraging words from the Fed chair

Thu, Feb 28 2008, 15:06 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

The major stock indices have found themselves up against major resistance but Bernanke’s pledge to diligence in keeping the economy humming seemed to deflect some of the selling. According to the Fed chair, their concern lies in the health of the economy rather than inflation. He confessed to lawmakers that the Fed will “act in a timely manner as needed to support growth and to provide adequate insurance against downside risks.” However, while the Fed is trying to put more faith in the economy, consumer confidence hasn’t responded.

As Bernanke was trying to boost spirits, investors were digesting less than impressive economic data. The commerce department reported a sharp draw in durable goods orders as well as more bad news from the housing market.

If you are trading the March options, keep in mind that option expiration has been bumped a day early do to the Good Friday holiday. On top of that, this will be a serial option expiration which typically takes place on Thursday rather than Friday. What you really need to know is that Wednesday March 19th will be the last trading day.

For now, it seems prudent to assume that the market is trading in a range and we are simply at the higher end of the channel. While I wouldn’t aggressively trade it, the path of least resistance in the near tem should be lower.

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

* February 22 – These expired worthless today!!!

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 Recommendation

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

Position Trade – Flat

Published on Thu, Feb 28 2008, 15:06 GMT

IBM buyback sparks rally

Wed, Feb 27 2008, 08:38 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

An IBM share buyback combined with short covering lead the broad market higher on the day. The Dow enjoyed a triple digit gain on the news, but was unable to close near the highs. Nonetheless, stocks have managed to make headway and prove the cynics wrong, at least for now. Even me, a long-term bull, can see vulnerability in the market. I am not completely convinced that this rally will hold, aggressive traders may even look to sell call options on additional strength.

IBM approved a $15 billion stock buyback, which gives investors some hope that there is still some money out there in corporate America. However, playing the devil’s advocate I argue that perhaps IBM didn’t anticipate the ability to provide growth to shareholders with the money via business investment and instead opted to give them “cash” indirectly. In other words, had IBM saw growth opportunity that offered a respectable return on investment they would have put the dollars to work…so the underlying message behind this move may not be a positive one as the market originally assumed.

Some insiders are putting faith into the move. “The market is kind of overcoming negative news, which is potentially a next step toward higher prices,” said Ryan Detrick a senior technical strategist at Schaeffer’s Investment Research. He added, “At least in the short-term, it’s a nice change here.”

However, others aren’t so confident. Peter Studemann the head trader and analyst for dow-trading, a dot com signal provider sees extremely heavy resistance at 12,800 and recommends selling the 128 March call for $2000. He points out that the recent rally has been surrounded by negative news and may simply be short covering.

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700 o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

* February 22 – These expired worthless today!!!

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 Recommendation

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

Position Trade – Flat

Published on Wed, Feb 27 2008, 08:38 GMT

Equities rally on S&P bond insurer ratings

Tue, Feb 26 2008, 14:12 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

Will this be the break-out of the range that we have all been waiting for? Although it was a dramatic swing from Friday’s low to Monday’s high, this rally simply brings the Dow to the top of its trading range. Whether further gains will be made is yet to be seen but despite being overall bullish, I have my doubts about the market’s ability to pull itself out of this without at least one more flushing low.

U.S. stocks waffled on both sides of unchanged for much of the day, but it was a late day announcement by Standard and Poor’s that excited the street. After speculations on S&P downgrades for many bond insurers, it was announced today that both Ambac and MBIA found sufficient funding to retain its AAA rating. This is significant in that the credit industry may face further erosion should bond insurers falter. Many bond insurers back corporate and municipal bonds to provide the issuing party higher ratings and cheaper financing. In other words, firms like Ambac are selling insurance against default to those wishing to issue bonds.

According to the National Association of Realtors, existing home sales hit a 9 year low, but it wasn’t considered to be a disaster in that the number slightly beat the market’s expectations. Nonetheless, analysts predicted further price declines in the months ahead given high levels of unsold homes. The median home price has dropped to $201,100 which is a drop of 4.6% from the reading at this time last year. Perhaps the most disappointing component of the report was the fact that inventories of unsold homes jumped to a 10.3 month supply.

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

* February 22 – These expired worthless today!!!

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 Recommendation

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

Position Trade – Flat

Published on Tue, Feb 26 2008, 14:12 GMT

Can you say range−bound?

Fri, Feb 22 2008, 12:52 GMT
by Carley Garner

Alaron

**Read my new column in Stocks and Commodities Magazine, “Futures for You”

Can you say “range –bound”? The stock market has gone from being obsessively directional to eerily directionless. That statement may seem ironic, given that the daily range from high to low was approximately 30 handles in the S&P and nearly 250 points in the Dow. However, if you look at the previous 7 sessions the market has failed to make progress in either direction. I am not complaining, just commenting….

The Philly Fed index, weekly jobless claims, and leading economic indicators came in weaker than expected to put an end to what started as a positive trading day. The financial markets seem to be calling for another 50 basis point cut in the March 18 meeting, but many are wondering whether it will be too little too fast. Despite what O’bama or Hilary has to say, economies are extremely large and complex. Economic and, in this case, monetary policy changes take several months or even years to have an impact. Just as any decision makers, the Fed are walking a tight-rope between being too aggressive and being too slow. Only time will tell how Bernanke’s policy will finally pan out, but chances are that an economic cycle can’t be stopped it can only be cushioned.

I still feel like the path of least resistance is lower for the major indices in the near-term, but warn that even if a re-test of the January lows is imminent you shouldn’t lose faith. I like the idea of selling puts on a strong move lower, assuming that the implied volatility creates option premium large enough to justify the risk.

Sorry so brief, we are short-handed due to the NYC Traders Expo.

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700 o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade –

February 7 - Believe it or not, the Nasdaq looks to have a better technical set up than the Dow. This is likely due to the fact that of all the sectors, tech stocks have been the red headed step children. It takes a lot of guts to fight the trend (and it didn’t work out to well for us last time) but I like buying a mini-Nasdaq at 1721 GTC.

* February 11th – So far so good, place a limit order to take profits at 1825 and a stop order to lock in profits at 1760.
o February 12th – move stop to 1780
o February 13th – You should have been filled 1825 to take a profit of about $2080 on a mini contract before commissions and fees. Don’t forget to cancel your stops!!

Published on Fri, Feb 22 2008, 12:52 GMT

Stocks recover, but still stuck in a rut

Thu, Feb 21 2008, 15:58 GMT
by Carley Garner

Alaron

**Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

Stocks erased a massive sell-off, leaving the major indices essentially unch’ed for the last six trading days. Ironically, it was beaten down financial stocks that fueled the turn-around. Tech stocks were lifted on an upbeat forecast from HP, while higher oil and gas prices boosted energy stocks.

Rising consumer prices left the Dow and S&P futures sharply lower ahead of the open on Wall Street. According to the Labor Department, the CPI index rose by .4% and a .3% increase in the core index. The number outpaces many economist expectations and sent stock futures, as well as bonds, into a tailspin.

Crude oil continues to break all-time records. While energy stocks are rallying and keeping the broader market in bright spirits this Euphoria may not last for long. High energy prices have been weighing on the economy for years, but haven’t delivered the crippling effect that many were looking for. However, if crude oil marches higher from here investors may get nervous.

I am leaning lower, but picking a direction here is a lot like flipping a coin. In the case of the Nasdaq, volatility is really low. I normally don't like the idea of buying options, but strangles may be appropriate here.

Sorry so brief, we are short-handed due to the NYC Traders Expo.

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700 o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade –

* February 11th – So far so good, place a limit order to take profits at 1825 and a stop order to lock in profits at 1760.
o February 12th – move stop to 1780
o February 13th – You should have been filled 1825 to take a profit of about $2080 on a mini contract before commissions and fees. Don’t forget to cancel your stops!!

Published on Thu, Feb 21 2008, 15:58 GMT

Stocks run, but stumble near finish line

Wed, Feb 20 2008, 08:02 GMT
by Carley Garner

Alaron

**Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

A promising start to the day slowly fizzled into unchanged by the end of trading. Much of the late day selling can be attributed to a substantial rally in crude oil. Oil prices closed above $100 for the first time ever, reminding Wall Street of inflationary pressures as well as the pinch on the consumer that inflated energies entail.

According to sources, there wasn’t a single event driving crude oil prices but the catalyst was an explosion at a Texas refinery that halts production of about 67k barrels per day. Rumors of an OPEC production cut also added fury to the speculative buying along with plenty of panic short covering.

We all know that it has been the consumer that has kept the economy afloat in recent years. Falling home prices and equity markets make people feel less financially stable and in some cases (home equity loans) have a direct impact on their spending. Likewise, Crude oil and distillates are relatively inelastic and have an immediate and direct impact on the amount of disposable income that consumers have. You put these two factors together and we could be in for a rough year. However, today was just a reminder of factors that we have been aware of for quite some time, and the markets have done a relatively good job of pricing this information in. With that said, although I am long-term bullish, it seems as though the path of least resistance is lower…at least for now. A re-test of the recent lows or maybe even the January lows may be in the cards.

From a technical perspective the market is stuck in a rut, and the breakout could be substantial regardless of the direction. If you are an option seller, this probably isn’t the best time to be selling premium. Be patient and look for some type of explosion in volatility.

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

Dow Recommendations...

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

Position Trade –

February 11 -. As an option seller, time works for you rather than against you so if you are willing to accept the risk, there is a lot of premium on the put side of this market. There may be some additional weakness, so I like trying to sell the March 113’s for $1500.

February 4 - Volatility remains high. This creates opportunities for traders to sell options for premium collection or in conjunction with a spread (combination of long and short options). Similar to the 1 by 2 put spread recommended below, you may be able to do a ratio call write using the 12,800 call and the 13,100 calls. This spread should be executed near even money. This simply means that you will be bringing in as much premium on the short options as you pay out on the long options. The risk is unlimited above 13,400 and will see its maximum profit of $3000 (assuming you are filled at even money) at expiration if the underlying market is trading at 13,100. Keep in mind that this trade pays out something anywhere from 12,800 to 13,400 and has no risk exposure beyond transaction costs and the cost of the spread (if any) below 12,800. Call me for help!!

January 14 – With the volatility up, so is the premium. Based on values seen at the end of the trading day, it is possible to buy a March 12,600 put and sell 2 of the 12,100 puts for a net credit of about $350 to $400 before commissions and fees. I am not a bear here, but this seems like the thing to do. The trade makes money intrinsically from 126 to 116, the max profit on the trade occurs at 121 and is in the amount of $5000 + the premium collected – transaction costs. The only way that this trade loses at expiration is if the market drops below the break even point of just under 116. Of course, the risk is unlimited under 116.

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

January 2 - I like the idea of beginning to shop for short put plays. I like the February 12,100 puts for about $1,000 (maybe a bit more). The break even on this trade would be about at about 12,000. In other words, the only way that this trade loses at expiration is if the Dow is trading below 12,000 on February 15th. Of course, the risk is unlimited beneath the break-even point.

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 Recommendation

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

Position Trade –

February 7 - Believe it or not, the Nasdaq looks to have a better technical set up than the Dow. This is likely due to the fact that of all the sectors, tech stocks have been the red headed step children. It takes a lot of guts to fight the trend (and it didn’t work out to well for us last time) but I like buying a mini-Nasdaq at 1721 GTC.

* February 11th – So far so good, place a limit order to take profits at 1825 and a stop order to lock in profits at 1760.
o February 12th – move stop to 1780
o February 13th – You should have been filled 1825 to take a profit of about $2080 on a mini contract before commissions and fees. Don’t forget to cancel your stops!!

Published on Wed, Feb 20 2008, 08:02 GMT

Fed Chair says 'sluggish' and the market listens

Fri, Feb 15 2008, 16:19 GMT
by Carley Garner

Alaron

**Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

Happy Valentines Day!!

It was back to the daily grind lower on Wall Street. Following a few days of gains, sellers were back to the markets. Bernanke’s comments weren’t welcomed by investors. The Fed chair believes that economic growth will be “sluggish” but is expected to improve later in the year. Correct me if I am wrong, but didn’t we already know this? Most of the media is blaming the stock market declines on these statements, but I argue that investors were actually more disappointed in the fact that Bernanke doesn’t think that the economy is a complete disaster. Had that been the case, the odds of an immediate rate cut would have gone up and stocks would have likely followed.

Also regurgitating information that we were already privy of, the Fed chair noted that the credit crisis and the slumping housing market have both weighed on the economy. As a result, hiring has suffered and this will likely lead to declines in consumer spending

In his exact words, “The outlook for the economy has worsened in recent months, and the downside risks to growth have increased.” He added, “To date, the largest economic effects of the financial turmoil appear to have been on the housing market, which, as you know, has deteriorated significantly over the past two years or so.”

The Dow chart doesn’t look good. The March contract has carved out a distinct down trending channel and failed to break out of the range yesterday. Going into a three day weekend, I favor the downside here but wouldn’t put my money on anything at this point.

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

Dow Recommendations...

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

Nasdaq Recommendation

* February 11th – So far so good, place a limit order to take profits at 1825 and a stop order to lock in profits at 1760.
o February 12th – move stop to 1780
o February 13th – You should have been filled 1825 to take a profit of about $2080 on a mini contract before commissions and fees. Don’t forget to cancel your stops!!

Published on Fri, Feb 15 2008, 16:19 GMT

Bush's booster shot aids rally

Thu, Feb 14 2008, 11:55 GMT
by Carley Garner

Alaron

**Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

While the direction was questionable early on, the major indices carved out impressive gains on the day. Some of our sources claim that the recent run up hasn’t necessarily lured buyers but has managed to squeeze a lot of the short traders out of the market. Whether the end result will be a full fledged rally is yet to be seen, but the market is beginning to show signs of regaining composure.

Retail sales were reported to be better than analyst expectations and even more important, in the positive. Despite shrinking sales for items related to housing such as furniture and electronics, sales increased by .3%. In the “new world” that we live in, it has become very obvious that data and news is streaky. We have seen runs of good news and runs of bad news. We happen to be enjoying the string of stock positive data, but should realize that the volatility will remain high and things can change at the blink of an eye.

Helping the market to make its way higher, President Bush signed the economic stimulus plan today which will inject billions of dollars into the hands of consumers. Bush refers to the plan as “a booster shot for our economy”, but opponents claim that it is simply a band aide on a much bigger problem. Nonetheless, it took some of the selling pressure off of the major indices.

According to Scott Fullman, director of investment strategy at I.A. Englander & Co., “So far this week there has been a positive bias, but I think what you’re seeing is people taking a very cautious approach.” He added, “There is no great rush to jump in, and the preservation of capital is more important than growth at this moment.”

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

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

Position Trade –

* February 11th – So far so good, place a limit order to take profits at 1825 and a stop order to lock in profits at 1760.
o February 12th – move stop to 1780

February 13th – You should have been filled 1825 to take a profit of about $2080 on a mini contract before commissions and fees. Don’t forget to cancel your stops!!

Published on Thu, Feb 14 2008, 11:55 GMT

Buffet sparks rally

Wed, Feb 13 2008, 11:54 GMT
by Carley Garner

Alaron

A Warren Buffet announcement early this morning regarding his plan to bail out bond insurers lifted spirits on Wall Street. The millionaire investor offered a second level of insurance on up to $800 in municipal bonds. Municipal bonds tend to have extremely low default risk, but the move does provide a small sense of comfort.

Also helping the stock market bid, the Fed announced an initiative that would put some foreclosures on hold for 30 days. Under so called “Project Lifeline”, lenders will contact homeowners who are 90 days or more overdue and give the debtor the opportunity to put the foreclosure process on hold for 30 days. During this time frame, the two parties will in theory be working together to make the mortgage more affordable to the homeowner. Whether this plan will even make a dent is yet to be seen, but equities may have a bit of buyers’ remorse tomorrow after contemplating Tuesday’s headlines. Every little bit helps and we will take anything that we can get, but I argue that this program should be called “Project Flat-line” instead.

According to sources, floor traders are banking on today’s rally failing. They continue to remind me that big bounces are all part of a bear market. I am still not convinced that we are in a bear market; I am of the belief that we have simply seen a painful correction in a bull market. Nonetheless, I do recognize that the risk of being exposed in this market (regardless of the direction) has increased exponentially. Rather than pick an immediate direction, I like selling premium…but proceeding with caution is a must.

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

Dow Recommendations...

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

Nasdaq Recommendation

* February 11th – So far so good, place a limit order to take profits at 1825 and a stop order to lock in profits at 1760.
o February 12th – move stop to 1780

Published on Wed, Feb 13 2008, 11:54 GMT

Up day on Wall Street, but lower highs and lower lows keep bears in control

Tue, Feb 12 2008, 16:34 GMT
by Carley Garner

Alaron

**Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

Stocks soured early, but bounced back with healthy momentum. We have all learned not to put too much into a stock market rally but today’s bid looked as promising as some of the triple digit short covering bounces. The market’s ability to maintain prices as opposed to succumbing to late day short selling suggests that investors may be making improvements in their state of mind and ability to make more rational decisions. The previous week’s panic trade has lead to exaggerated moves but ultimately created bargains on Wall Street. While we can’t rule out a retest of the recent lows, it may be time to put on the rally cap if you are a long term investor.

Traders on the other hand often have a shorter time horizon and entry points are much more critical. For this reason, I believe that selling put options into weakness although a potentially risky approach is sound in strategy. By most measures, the equity markets have seen a 15 to 20% correction from the 2007 highs. If the bull market is still alive, this should be enough of a correction to fulfill the digestive needs of the market and ultimately and minimally serve as a temporary level of support. As an option seller, time works for you rather than against you so if you are willing to accept the risk, there is a lot of premium on the put side of this market. There may be some additional weakness, so I like trying to sell the March 113’s for $1500.

I see near term resistance in the Dow at 12,372 and support at 11,949. In the Nasdaq, support can be found at 1728 and resistance at 1826.

Believe it or not, I still remain a long term bull...we are continuously reminded of the bearish obstacles facing this market, but there are still some supportive factors. If you would like additional insight on the markets and what the upcoming year may bring email me at cgarner@alaron.com with your name, address and phone number.

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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.

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

Position Trade –

· February 11th – So far so good, place a limit order to take profits at 1825 and a stop order to lock in profits at 1760.

Published on Tue, Feb 12 2008, 16:34 GMT

Rocky road, and we aren't talking about ice cream

Fri, Feb 8 2008, 11:20 GMT
by Carley Garner

Alaron

**Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

It was a rocky session on Wall Street; the March Dow had a range of nearly 250 points leaving many traders with a headache. I wish someone would have warned me, I would have taken Dramamine early this morning. Instead, I along with many others, were subject to the brunt of an extremely choppy and erratic session.

Rumors regarding Tuesday’s ISM Services index being miscalculated sparked a short covering rally late in the session. However, the rumors were quickly put to rest…and so was the rally. A triple digit rally in the Dow quickly turned well into negative territory.

It looks as though investors may be finally coming to the realization that there are several values in the stock market. Picking a low is impossible, but finding a bargain isn’t. Whether or not the major indices will retest the lows is up for debate, but fresh cash coming into the market could become a reality in the near future. As a trader, I am looking for the Dow to retest 12,000 or even 11,900 to create an opportunity to sell puts. As an investor, long-term (non-leveraged) purchases of the major stock indices seem to be a smart move.

Believe it or not, the Nasdaq looks to have a better technical set up than the Dow. This is likely due to the fact that of all the sectors, tech stocks have been the red headed step children. It takes a lot of guts to fight the trend (and it didn’t work out to well for us last time) but I like buying a mini-Nasdaq at 1721 GTC.

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

Dow Recommendations...

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

Position Trade –

* January 15 – We were getting filled on this trade at a credit of $700
o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

Position Trade –

Published on Fri, Feb 8 2008, 11:20 GMT

Retest of the lows?

Thu, Feb 7 2008, 10:44 GMT
by Carley Garner

Alaron

*Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

Equities remain extremely weak; all rallies are being met with dissention and sentiment is becoming exponentially bearish. Adding to the negative tone were comments from Federal Reserve Bank of Philadelphia President Charles Plosser suggesting that although the economy is slowing we are also seeing price pressures. He stated, “we must not lose sight of the other part of the Fed’s dual mandate, which is price stability.” The remark reminded investors of the possibility of stagflation.

Whether you have been bearish or bullish, there is a good chance that you have struggled to trade in these market conditions. The immense volatility and emotional fatigue is taking its toll on many. In fact, many S&P floor traders failed to show up for work on Monday. Word has it that even the seasoned “pros” and those as close to the action as you can get are experiencing massive losses as the market has been whip-sawing.

Cisco reported a second quarter profit to match Wall Street expectations, but it was too little too late. The world’s largest internet networking supplier saw a profit in crease of 7% to 33 cents per share.

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

Dow Recommendations...

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

Position Trade –

· January 15 – We were getting filled on this trade at a credit of $700

o The market is higher, but that is ok. If the spread expires worthless we get to keep the premium collected.

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 Recommendation

Position Trade – Flat

Published on Thu, Feb 7 2008, 10:44 GMT

One of the biggest two day drops in years...

Wed, Feb 6 2008, 10:27 GMT
by Carley Garner

Alaron

**Be sure to read my exclusive interview in the February issue of Stocks and Commodities Magazine!!

It was another dismal day on Wall Street. Thus far 2008 has turned out to be nothing short of disaster. Despite last week’s record rally, the major indices are sharply lower on the year and there doesn’t seem to be a light at the end of the tunnel. Given the sluggish nature of equities, it seems as though it will take an extraordinary event in order to turn this market around for good. When that will be is anybody’s guess, but will it happen…of course.

Today was the biggest two day drop in the indices in quite some time and has successfully taken the wind out of the sails of the bulls. The downward spiral began in overnight trading and continued following an announcement that the ISM service index showed contraction in the month of January. Economists were looking for another month of growth. Keep in mind that the last time that the service sector shrunk was in March of 2003.

“The report drives nail into the coffin from investors’ minds that we’re in a recession,” according to Todd Salamone, director of trading at Schaeffer’s Investment Research. “That doesn’t me

FXstreet.com

Fundamental

The Dow Futures Report

US Equities higher on better than expected pending home sales

Sustainability of funding for economic recovery comes into question

US Stocks rally as consumers sense recession may be bottoming

US Stocks fall

US Stocks retreat from early gains

US Stocks put poor housing data in perspective

US Stocks Start The Summer Party Early

US EQUITIES rally back from key support levels

US stocks head for the exits

US stocks fall for second session

Technology stocks gain on positive outlook for servers

US Equities experience a stally in the rally

Financials and energies lead rally

US Equities tred a cautious session, profilt taking ahead

US Equities trade to 2009 highs

US Equity post FOMC rally stalls on disappointing profits from EXXON mobil

US Equities rally to fresh technical highs

US Equities fall in volatile session as banking concerns

US Equities fall on swine flu concerns

Traders take direction from banking stress test hopes

US Equities trade through a seesaw session

Majority likely to pass Government "STRESS TESTS"

Broad Based retreat on all major indices

US Equities gain strength, as data shows economy may be stabilizing

US Equities rally from lows, led by financials, consumer products

Us equities retreat after worse

Us equities rebound from nervous opening

Us equities join the global party rally

US Equities post gains

Equities continue to fall on earnings nerves, outlook for financials

IBM Sun Microsystems merger breaks down

Equities send up a chert as G20 summit outlines trillion dollar global stimulus

Equities gain as good data triumphs over evil employment outlook

Financials rebound in wale of poor data

Financials Commodity Stocks Pressired

Equities push trough and hold above key resistance levels

Equities Srage Volatile Session

Markets digest details of treasury plan to clear toxic assets

US equities skyrocket as Treasury plan is given "thumbs up" support by key money managers

Equities rally on GMAC lifeline

The New NASDAQ−Dow Report

Stocks Prove to be Resilient, but Monday Differ

Post FOMC Rally Goes Down in Flames

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Nasdaq Recommendation

Quadruple Witching Stirs Choppy Trade

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Rough Week on Wall Street (or Wacker if trading futures)

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Nasdaq Recommendation

Mixed Equities on Mixed Crude Oil

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Quietly Higher

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Nasdaq Recommendation

Stocks Battered...Again

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Stop Running (in both directions) Dominated Trade

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Bulls Bulldoze

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Wild Wall Street

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Stocks Suffer on Light Volume

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Nasdaq Recommendation

Stocks Higher, but Resistance Looms

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Crude Oil Trumps Durable Goods

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