The major indices finally broke their winning streak but the selling pressure was moderate. This may suggest another retest of the highs, or slightly new highs, are in the cards. Despite today's minor digestion, we feel as though a larger correction is looming at some point. However, we also can't rule out a continuation of the squeeze to elect buy stops in the 958 area of the September S&P. If this happens, we could see 960/962 before running out of buyers.
In the meantime, investors are focused on Fed Chairman Bernanke's congressional testimony. The "grilling" started today and will extend through tomorrow. However, the topic of discussion doesn't seem to be anything new and exciting. Although, Bernanke did mention that inflation doesn't seem to be a threat in the coming few years and claims to have the "tools" needed to fight that battle once it begins to emerge.
The market continues to see the CIT story as a positive sign that the economy has turned the corner from government subsidies to private equity financing. However, it has been corporate earnings that have made this rally possible. Caterpillar beat analyst expectations and announced and improved profit forecast for 2009. Due to Caterpillars role in the expansion of industry, it is considered to be somewhat of a bellwether of the global economy.
Either we are early, or we are just plain wrong but we still think that a near-term top is in the cards for the major indices. We are sticking with yesterday's call of an extension of the rally to the mid 950's or possibly the low 960's but at such levels we are highly bearish. That said, there is still a lot of cash on the sidelines and if there are shorts looking for a way out of the squeeze, we are hearing that there are buy stops running all the way to 1,000. Be careful!
If you want to play the downside with limited risk, we like lottery ticket plays such as buying the August 880 or 885 puts. Fills were coming in for the 885's this morning near $6.50.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
Please note: A mini S&P chart is used because it is better for charting purposes, but trade recommendations are based the full sized S&P unless otherwise noted.
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.
Russell Futures and Options Trading 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 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
In the meantime, investors are focused on Fed Chairman Bernanke's congressional testimony. The "grilling" started today and will extend through tomorrow. However, the topic of discussion doesn't seem to be anything new and exciting. Although, Bernanke did mention that inflation doesn't seem to be a threat in the coming few years and claims to have the "tools" needed to fight that battle once it begins to emerge.
The market continues to see the CIT story as a positive sign that the economy has turned the corner from government subsidies to private equity financing. However, it has been corporate earnings that have made this rally possible. Caterpillar beat analyst expectations and announced and improved profit forecast for 2009. Due to Caterpillars role in the expansion of industry, it is considered to be somewhat of a bellwether of the global economy.
Either we are early, or we are just plain wrong but we still think that a near-term top is in the cards for the major indices. We are sticking with yesterday's call of an extension of the rally to the mid 950's or possibly the low 960's but at such levels we are highly bearish. That said, there is still a lot of cash on the sidelines and if there are shorts looking for a way out of the squeeze, we are hearing that there are buy stops running all the way to 1,000. Be careful!
If you want to play the downside with limited risk, we like lottery ticket plays such as buying the August 880 or 885 puts. Fills were coming in for the 885's this morning near $6.50.
**Seasonality is already be factored into current prices, any references to such does not indicate future market action.
Please note: A mini S&P chart is used because it is better for charting purposes, but trade recommendations are based the full sized S&P unless otherwise noted.
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.
Russell Futures and Options Trading 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 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
