• Home ::
• Fundamental ::
• Market View ::
• The Dow Futures Report

• Send
• Print
• Add To
• Rss

The Dow Futures Report

7f75b11a-f030-4839-94ac-49b7bd208438

0

0

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...

**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 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

**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.

Published on  Wed, May 21 2008, 11:01 GMT