carleygarner
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July 21st, 2010
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Bernanke uncertain about recovery
The markets have been nice and choppy. For most this means there has been more money lost than made.
Fed Chair Ben Bernanke spooked the market by verbally expressing his concern over an uncertain outlook. Investors immediately hit the sell button and with massive sell stop orders working below, the indices had little chance of avoiding the slide. Also, rumors circulating the CME floor suggest that once of the catalysts to the move was a standing 600 lot stop order in the large S&P futures pit that, once elected, triggered an impressive down-draft.
Specifically, Bernanke stated that the U.S. economy faces "unusually uncertain" prospects but mentioned that the Fed hadn't used all of its resources and would be ready to take further steps to bolster growth if needed. Overall the testimony was less than optimistic but it was also less than surprising. There weren't any startlingly new revelations.
From a technical standpoint, the market is highly mixed. We have been noting 1066ish as the pivot in the S&P (ie. the make or break area) but it has also been acting as a magnet and this makes it tough to pick a direction. In yesterday's newsletter we mentioned that we couldn't be bullish 30 handles from the day's lows and that playing the other side would be a better play, but we didn't expect the fall-out that occurred. Going into tomorrow, we are uncertain of the intermediate -term direction but seasonal tendencies suggest that the markets could go lower before moving higher and the S&P failed at its down-trend line. That said, the session closed near the lows and this usually paves the way for back and fill trade overnight. In other words, if you want to be a bear...don't chase the market lower; selling on rallies might be the play but a "normal" bounce could see prices as high as 1075ish in the S&P.
* 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: A mini S&P chart is used because it is 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.
S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
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
*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.
~Come and trade with us at DeCarley Trading to get these reports delivered to your inbox daily~
Bernanke uncertain about recovery
The markets have been nice and choppy. For most this means there has been more money lost than made.
Fed Chair Ben Bernanke spooked the market by verbally expressing his concern over an uncertain outlook. Investors immediately hit the sell button and with massive sell stop orders working below, the indices had little chance of avoiding the slide. Also, rumors circulating the CME floor suggest that once of the catalysts to the move was a standing 600 lot stop order in the large S&P futures pit that, once elected, triggered an impressive down-draft.
Specifically, Bernanke stated that the U.S. economy faces "unusually uncertain" prospects but mentioned that the Fed hadn't used all of its resources and would be ready to take further steps to bolster growth if needed. Overall the testimony was less than optimistic but it was also less than surprising. There weren't any startlingly new revelations.
From a technical standpoint, the market is highly mixed. We have been noting 1066ish as the pivot in the S&P (ie. the make or break area) but it has also been acting as a magnet and this makes it tough to pick a direction. In yesterday's newsletter we mentioned that we couldn't be bullish 30 handles from the day's lows and that playing the other side would be a better play, but we didn't expect the fall-out that occurred. Going into tomorrow, we are uncertain of the intermediate -term direction but seasonal tendencies suggest that the markets could go lower before moving higher and the S&P failed at its down-trend line. That said, the session closed near the lows and this usually paves the way for back and fill trade overnight. In other words, if you want to be a bear...don't chase the market lower; selling on rallies might be the play but a "normal" bounce could see prices as high as 1075ish in the S&P.
* 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: A mini S&P chart is used because it is 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.
S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
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
*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.
