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

• Send
• Print
• Add To
• Rss

The Dow Futures Report

f7f791c2-8092-486d-9180-d735238d1a63

0

0

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, 12:25 GMT