Today marked the end of a significant month in equities, but one may not have realized it by looking at intraday trade. The month of July saw a rally that, in terms of percentages, was the strongest seen since 2002.
Traders were relatively undecided on the fate of the equity rally following a better than expected advanced GDP estimate for the second quarter but a simultaneous revision downward to first quarter growth. Second quarter Gross Domestic Product is estimated to be a negative 1% as opposed to a negative 1.5% as expected by most analysts. The first quarter GDP was revised to a dismal - 6.4% from what seemed to be an already challenging figure of -5.5%.
While the GDP has been the most promising sign of recovery to date, the latest reports suggests that consumers cut spending by 1.2% in the second quarter. Steven Stahler, president of Stahler Group in Baton Rouge, La. claimes, "We're still not in very good shape in the employment part." Until this turns around, the consumer will have a difficult time leading the economy out of the longest recession since World War II.
We can't rule out another run at the highs and buy stops may even lead to a move a little above 1,010 in the September S&P futures, 1660 in the NASDAQ and 570 in the Russell. However, we have doubts as to whether the market can sustain such levels. That said, don't get overly bearish...the trend is up regardless of what anybody may think the fundamentals suggest.
* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.
**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 22 - Buy cheap August S&P puts. We like the 880's and the 885's, you shouldn't pay more than $6.50
July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
• July 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
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 -
July 28 - Sell the e-mini NASDAQ at 1630 or better.
Traders were relatively undecided on the fate of the equity rally following a better than expected advanced GDP estimate for the second quarter but a simultaneous revision downward to first quarter growth. Second quarter Gross Domestic Product is estimated to be a negative 1% as opposed to a negative 1.5% as expected by most analysts. The first quarter GDP was revised to a dismal - 6.4% from what seemed to be an already challenging figure of -5.5%.
While the GDP has been the most promising sign of recovery to date, the latest reports suggests that consumers cut spending by 1.2% in the second quarter. Steven Stahler, president of Stahler Group in Baton Rouge, La. claimes, "We're still not in very good shape in the employment part." Until this turns around, the consumer will have a difficult time leading the economy out of the longest recession since World War II.
We can't rule out another run at the highs and buy stops may even lead to a move a little above 1,010 in the September S&P futures, 1660 in the NASDAQ and 570 in the Russell. However, we have doubts as to whether the market can sustain such levels. That said, don't get overly bearish...the trend is up regardless of what anybody may think the fundamentals suggest.
* Due to time constraints and our fiduciary duty to put clients first, the charts provided in this newsletter may not reflect the current session data. However, market analysis and commentary does. Charts provided by Track 'n Trade, Gecko software.
**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 22 - Buy cheap August S&P puts. We like the 880's and the 885's, you shouldn't pay more than $6.50
July 15 - We like selling the August 975 calls, fills ranged from $7 to $9 today.
• July 28 - We recommended to sell the 925 puts for a little over $8 to take a bit of the heat off of the 975 calls
• July 29 - We recommended to buy back the 975 and sell the 995 to give the trade a bit more breathing room and lower the delta
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 -
July 28 - Sell the e-mini NASDAQ at 1630 or better.
