carleygarner
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Say hello to relief rally, stock index futures?
The equity markets saw little trading volume on what could have been one of the most exciting sessions this year. Aside from temporary volatility following the employment report and in the last hour of trade, the markets spent most of the session migrating back to where they started. In the case of the September S&P, 1024 acted like a magnet.
I hope that most of you were able to get flat early in the session. As the day wore on, trading participants dropped like flies. Light volume tends to propel short-term volatility and today wasn't any different. Once the cash market closed, futures spent the 15 minutes between the 4 pm Eastern NYSE close and the CME futures close at 4:15 in freefall. This makes for an ugly close, but in all honesty makes me feel better about a possible dead-cat bounce come Tuesday. After all, the move was clearly made on position squaring and those that were anxious to sell ahead of the weekend might sigh in relief come next week.
The government reported that the private sector added 83,000 jobs last month, but in combination with the laid off census workers the headline non-farm payrolls figure was a dismal -125,000. The number was worse than analyst had expected but arguably better than the market had already priced in.
We hate to be repetitive, but we want to reiterate yesterday's comments :
Our floor brokers are looking for 980 as their first downside target and this is a real possibility but we doubt that those prices will be seen before some type of technical bounce occurs. The markets have just grown too bearish. TV and blog talk of the "death cross" and the "head and shoulders" in the S&P has probably lured in the last of the sellers and it is these late comers that could help propel the markets higher as they are quick to cover bad trades.
If you aren't familiar with the death cross sell signal, it is when the 50 day moving average crosses the 200 day moving average. As you can imagine, it isn't something that happens often and it tends to get the bears excited.
In addition to being technically oversold, there are a few cases to argue that the bears could begin covering shorts. For one, The short covering in the Euro has been swift and pressure on the greenback immense. Also, the gold bugs were the first to indicate a collapse in stocks but gold had its biggest losing day since February....are they now predicting temporary economic stability? Third, we are headed into a holiday weekend and position squaring will play a big part in tomorrow's action.
It might not last forever, but we feel like buying into weakness is the way to trade this market in the near term.
Our support level of 1012 in the S&P held nicely on Friday, so did 692 in the Russell. Going into Tuesday, we will stick with these numbers but can't rule out a test of 1000 in the S&P and 682 in the Russell. However, we feel as though the noted levels could be a short-term opportunity for the bulls.
Don't forget.... He who goes forth on the 4th with a fifth, rarely goes forth on the fifth....
* 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 -
June 29 - Clients were recommended to sell the August S&P 880 puts for about $10
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.
The equity markets saw little trading volume on what could have been one of the most exciting sessions this year. Aside from temporary volatility following the employment report and in the last hour of trade, the markets spent most of the session migrating back to where they started. In the case of the September S&P, 1024 acted like a magnet.
I hope that most of you were able to get flat early in the session. As the day wore on, trading participants dropped like flies. Light volume tends to propel short-term volatility and today wasn't any different. Once the cash market closed, futures spent the 15 minutes between the 4 pm Eastern NYSE close and the CME futures close at 4:15 in freefall. This makes for an ugly close, but in all honesty makes me feel better about a possible dead-cat bounce come Tuesday. After all, the move was clearly made on position squaring and those that were anxious to sell ahead of the weekend might sigh in relief come next week.
The government reported that the private sector added 83,000 jobs last month, but in combination with the laid off census workers the headline non-farm payrolls figure was a dismal -125,000. The number was worse than analyst had expected but arguably better than the market had already priced in.
We hate to be repetitive, but we want to reiterate yesterday's comments :
Our floor brokers are looking for 980 as their first downside target and this is a real possibility but we doubt that those prices will be seen before some type of technical bounce occurs. The markets have just grown too bearish. TV and blog talk of the "death cross" and the "head and shoulders" in the S&P has probably lured in the last of the sellers and it is these late comers that could help propel the markets higher as they are quick to cover bad trades.
If you aren't familiar with the death cross sell signal, it is when the 50 day moving average crosses the 200 day moving average. As you can imagine, it isn't something that happens often and it tends to get the bears excited.
In addition to being technically oversold, there are a few cases to argue that the bears could begin covering shorts. For one, The short covering in the Euro has been swift and pressure on the greenback immense. Also, the gold bugs were the first to indicate a collapse in stocks but gold had its biggest losing day since February....are they now predicting temporary economic stability? Third, we are headed into a holiday weekend and position squaring will play a big part in tomorrow's action.
It might not last forever, but we feel like buying into weakness is the way to trade this market in the near term.
Our support level of 1012 in the S&P held nicely on Friday, so did 692 in the Russell. Going into Tuesday, we will stick with these numbers but can't rule out a test of 1000 in the S&P and 682 in the Russell. However, we feel as though the noted levels could be a short-term opportunity for the bulls.
Don't forget.... He who goes forth on the 4th with a fifth, rarely goes forth on the fifth....
* 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 -
June 29 - Clients were recommended to sell the August S&P 880 puts for about $10
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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