carleygarner
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September 1st, 2010
What are the true costs of trading futures and options? Carley Garner and Karen Gibbs discuss.... http://www.aweber.com/archive/decarleystock/.MPm
Back and fill Thursday in stock index futures?
Although this month is known as "Black September" because of its propensity to provide negative stock returns, the first trading day of September has now posted gains in 12 of the last 15 occasions.
It is also important to realize that despite media banter about dismal performance in September, the average broad market loss is less than 1%. The bears will tell you that in September of 2009 the markets were coming off a rough August, not unlike what we are seeing play out in 2010. Similarly, investor sentiment was pointing toward doom and gloom and market commentators warned of rocky September seasonals. Yet, the market found a low on September 2nd and rallied nearly 80 handles. Can we get a repeat of last year? We think everything is lining up to pave the way.
The major indices were vastly oversold and due for a relief rally, the question now remains whether or not it can hold gains...or more importantly continue higher. Things look good to us, if you recall in yesterday's newsletter we noted
"It took a while to sink in, but I think the market eventually saw the Fed minutes as market supportive. The committee maintained a relatively stable to optimistic outlook on the economy as well as pledged to take further steps if necessary. In addition, they are dead set on keeping interest rates low...and isn't that what corporate America needs to fund operations and make money?"
Some back and filling is likely necessary and the S&P faces strong resistance near 1080, we doubt the move is over. It is highly likely that this rally caught some large bears standing in front of the bus and they will be looking for opportunities to get out. This means than any pull-back could be met with another round of short covering. Assuming tomorrow's jobless claims and Friday's employment report (referred to as an "unenjoyment report" by our open outcry execution desk) are respectable the September S&P futures contract could be going for just under 1100 and if we get a string of good news...1130 could be on tap.
If you are trading the NASDAQ, 1830 is the pivot but the next resistance will be 1873. Like the others, the Russell faces immediate resistance near 624, but if follow through the next resistance will be about 650.
* 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 factored into current prices, any references to such does not indicate future market action.
Please note: An e-mini S&P and e-mini NASDAQ chart are used because they better for charting purposes, but trade recommendations can be applied to either the full-sized S&P or the mini. Unless otherwise noted, profit and loss will be based on the mini version.
Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
August 24 - Clients were advised to sell October S&P 900 puts for $8/$9 in premium.
*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.
There is substantial risk of loss in trading futures and options.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
What are the true costs of trading futures and options? Carley Garner and Karen Gibbs discuss.... http://www.aweber.com/archive/decarleystock/.MPm
Back and fill Thursday in stock index futures?
Although this month is known as "Black September" because of its propensity to provide negative stock returns, the first trading day of September has now posted gains in 12 of the last 15 occasions.
It is also important to realize that despite media banter about dismal performance in September, the average broad market loss is less than 1%. The bears will tell you that in September of 2009 the markets were coming off a rough August, not unlike what we are seeing play out in 2010. Similarly, investor sentiment was pointing toward doom and gloom and market commentators warned of rocky September seasonals. Yet, the market found a low on September 2nd and rallied nearly 80 handles. Can we get a repeat of last year? We think everything is lining up to pave the way.
The major indices were vastly oversold and due for a relief rally, the question now remains whether or not it can hold gains...or more importantly continue higher. Things look good to us, if you recall in yesterday's newsletter we noted
"It took a while to sink in, but I think the market eventually saw the Fed minutes as market supportive. The committee maintained a relatively stable to optimistic outlook on the economy as well as pledged to take further steps if necessary. In addition, they are dead set on keeping interest rates low...and isn't that what corporate America needs to fund operations and make money?"
Some back and filling is likely necessary and the S&P faces strong resistance near 1080, we doubt the move is over. It is highly likely that this rally caught some large bears standing in front of the bus and they will be looking for opportunities to get out. This means than any pull-back could be met with another round of short covering. Assuming tomorrow's jobless claims and Friday's employment report (referred to as an "unenjoyment report" by our open outcry execution desk) are respectable the September S&P futures contract could be going for just under 1100 and if we get a string of good news...1130 could be on tap.
If you are trading the NASDAQ, 1830 is the pivot but the next resistance will be 1873. Like the others, the Russell faces immediate resistance near 624, but if follow through the next resistance will be about 650.
* 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 factored into current prices, any references to such does not indicate future market action.
Please note: An e-mini S&P and e-mini NASDAQ chart are used because they better for charting purposes, but trade recommendations can be applied to either the full-sized S&P or the mini. Unless otherwise noted, profit and loss will be based on the mini version.
Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
August 24 - Clients were advised to sell October S&P 900 puts for $8/$9 in premium.
*Due to the volatile nature of the futures markets some information and charts in this report may not be timely.
There is substantial risk of loss in trading futures and options.
Past performance is not indicative of future results. The information and data in this report were obtained from sources considered reliable. Their accuracy or completeness is not guaranteed and the giving of the same is not to be deemed as an offer or solicitation on our part with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction.
