carleygarner
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May 27th, 2010
Check out the Futures Magazine review of "A Trader's First Book on Commodities" by Carley Garner
http://www.futuresmag.com/Issues/20...on-to-the-Worlds-Fastest-Growing--Market.aspx
Can we call it a bottom?
The markets were met with sharp selling into Wednesday's close and experienced follow through selling on the afternoon re-open. Those following stock index futures in the overnight session likely expected to wake up to sharply lower valuations across the board. Nonetheless, it was the complete opposite scenario.
It is now clear that the temporary bout of selling was triggered on rumors and speculation regarding a Chinese departure from Euro-based assets. As investors and traders realized that there wasn't an immediate threat, a sigh of relief lead to aggressive short-covering and eventually bullish buying.
There are doubts as to whether the rally will be able to sustain itself...and we have to admit that we share some of those fears. The markets had become so dramatically oversold, that large bounces are to be expected. However, in the near -term we are looking for a continuation of the move to the high 1120's to the mid-1130's in the S&P. At this point we will become relatively neutral and will be looking for clues as to the next direction.
If you are following our short option trades, our clients were recommended to buy back their June 970 puts yesterday and fills were coming in near $6 in premium. It has been an extremely volatile and challenging month for option selling programs...but that comes with the strategy. Just as insurance companies collect premium on a regular basis knowing that at some point they will be forced to pay out expensive claims, option sellers must realize that there will be good times and bad. In theory, the good times will outweigh the bad, but that doesn't mean that the strategy can be put on cruise control. It takes good instincts, patience, market knowledge and a little bit of luck.
If we are right about this rally, we should see 1130ish in the June S&P in the coming sessions. That would equate to 1890 in the NASDAQ and a bit over 680 in the Russell.
* 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 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 -
May 10 - After several adjustments, and challenging market conditions, our clients have been recommended to hold the short June 1100 puts. We are underwater considerably on the position but hope to be able to recoup as the market stabilizes.
May 20th - Clients were recommended to roll the June 1100's into the June 970 and the July 970. Doing so enabled them to recoup most of the premium, while giving the market some breathing room and keeping some exposure in the faster eroding June options. However, for this move to work we need lower volatility!
May 26th - Clients were advised to buy back the June 970 puts at a profit, we will hold the July's for now.
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
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701
*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.
Check out the Futures Magazine review of "A Trader's First Book on Commodities" by Carley Garner
http://www.futuresmag.com/Issues/20...on-to-the-Worlds-Fastest-Growing--Market.aspx
Can we call it a bottom?
The markets were met with sharp selling into Wednesday's close and experienced follow through selling on the afternoon re-open. Those following stock index futures in the overnight session likely expected to wake up to sharply lower valuations across the board. Nonetheless, it was the complete opposite scenario.
It is now clear that the temporary bout of selling was triggered on rumors and speculation regarding a Chinese departure from Euro-based assets. As investors and traders realized that there wasn't an immediate threat, a sigh of relief lead to aggressive short-covering and eventually bullish buying.
There are doubts as to whether the rally will be able to sustain itself...and we have to admit that we share some of those fears. The markets had become so dramatically oversold, that large bounces are to be expected. However, in the near -term we are looking for a continuation of the move to the high 1120's to the mid-1130's in the S&P. At this point we will become relatively neutral and will be looking for clues as to the next direction.
If you are following our short option trades, our clients were recommended to buy back their June 970 puts yesterday and fills were coming in near $6 in premium. It has been an extremely volatile and challenging month for option selling programs...but that comes with the strategy. Just as insurance companies collect premium on a regular basis knowing that at some point they will be forced to pay out expensive claims, option sellers must realize that there will be good times and bad. In theory, the good times will outweigh the bad, but that doesn't mean that the strategy can be put on cruise control. It takes good instincts, patience, market knowledge and a little bit of luck.
If we are right about this rally, we should see 1130ish in the June S&P in the coming sessions. That would equate to 1890 in the NASDAQ and a bit over 680 in the Russell.
* 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 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 -
May 10 - After several adjustments, and challenging market conditions, our clients have been recommended to hold the short June 1100 puts. We are underwater considerably on the position but hope to be able to recoup as the market stabilizes.
May 20th - Clients were recommended to roll the June 1100's into the June 970 and the July 970. Doing so enabled them to recoup most of the premium, while giving the market some breathing room and keeping some exposure in the faster eroding June options. However, for this move to work we need lower volatility!
May 26th - Clients were advised to buy back the June 970 puts at a profit, we will hold the July's for now.
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
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
[email protected]
1-866-790-TRADE
Local : 702-947-0701
*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.
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