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The Dow Futures Report

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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, 10:51 GMT