Even the bulls are likely a little surprised by the resiliency of the most recent broad market rally. A positive earnings season and a possible resolution to the CIT insolvency has managed to propel equities nicely higher from last Monday's early session lows.
CIT Group has apparently struck a deal with its bond holders to avoid bankruptcy. This comes after bailout funds requested from the fed failed to come through. The market was pleased with the news given the potential consequences of a failure to many small businesses. Some analysts point out that the fact that the government wasn't forced to intervene and CIT was able to secure private financing suggests that the financial markets are healing.
Earnings have been a pleasant surprise but the bulk of the numbers have yet to be released. Investors will likely be focusing on retail stocks, which haven't been represented as of yet. Poor retailer numbers could trigger a case of buyer's remorse and lead to a swift correction. On the other hand, should retailers have a good showing this rally may have more legs that we originally anticipated. The high 950's don't seem to be out of the question and some of our contacts on the floor note that even 1,000 is possible on the running of buy stops.
I am not convinced that we will see much higher this time around. I tend to favor the idea of, at minimum, a temporary correction that could bring the S&P back to the 908 area. However, the light volume makes for very one directional trade and I worry that the lack of liquidity will work in favor of the short squeeze.
We continue to fight against the grain looking for a correction in equities, but I am not going to lie...we are nervous bears. Last week we noted that a run to the mid 940's may be possible in the S&P and now that we are here it seems like the buying could extend to the mid 950's and maybe even 961. Nonetheless, I am having a hard time jumping on the bull bandwagon...at least for now.
We also pointed out resistance in the Dow near 8,850 and 1540 in the NASDAQ. These levels have quickly come into play, and moderately higher without a pullback is possible but we have to wonder how long this can last. Nonetheless, if this rally resumes the next stopping point will be 8,880 and 1580 respectively.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
July 7th- We recommended to sell the August S&P 760 puts for $6.50 or better
• July 15 - We advised buying this option back for $2 or less, you should be out of this trade with a respectable profit. Don't let this option sit!
Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
CIT Group has apparently struck a deal with its bond holders to avoid bankruptcy. This comes after bailout funds requested from the fed failed to come through. The market was pleased with the news given the potential consequences of a failure to many small businesses. Some analysts point out that the fact that the government wasn't forced to intervene and CIT was able to secure private financing suggests that the financial markets are healing.
Earnings have been a pleasant surprise but the bulk of the numbers have yet to be released. Investors will likely be focusing on retail stocks, which haven't been represented as of yet. Poor retailer numbers could trigger a case of buyer's remorse and lead to a swift correction. On the other hand, should retailers have a good showing this rally may have more legs that we originally anticipated. The high 950's don't seem to be out of the question and some of our contacts on the floor note that even 1,000 is possible on the running of buy stops.
I am not convinced that we will see much higher this time around. I tend to favor the idea of, at minimum, a temporary correction that could bring the S&P back to the 908 area. However, the light volume makes for very one directional trade and I worry that the lack of liquidity will work in favor of the short squeeze.
We continue to fight against the grain looking for a correction in equities, but I am not going to lie...we are nervous bears. Last week we noted that a run to the mid 940's may be possible in the S&P and now that we are here it seems like the buying could extend to the mid 950's and maybe even 961. Nonetheless, I am having a hard time jumping on the bull bandwagon...at least for now.
We also pointed out resistance in the Dow near 8,850 and 1540 in the NASDAQ. These levels have quickly come into play, and moderately higher without a pullback is possible but we have to wonder how long this can last. Nonetheless, if this rally resumes the next stopping point will be 8,880 and 1580 respectively.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
July 7th- We recommended to sell the August S&P 760 puts for $6.50 or better
• July 15 - We advised buying this option back for $2 or less, you should be out of this trade with a respectable profit. Don't let this option sit!
Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
