August 11th, 2009
Check out IndianaGrain.com (http://www.indianagrain.com/blog/carley-garner-knows-her-options) for the latest review of Carley's book, "Commodity Options"!
Traders lock in profits ahead of event risk
The longs have finally been convinced to take some of their profits off of the table. Despite what might have occurred given the dramatic gains, the selling pressure was moderate at best.
Investors are looking forward to the Fed's comments regarding the state of the economy. Oh yeah, and they also might be interested in the interest rate decision. We have been suggesting that the rally has gotten away from what may be the reality, and the Fed's wording could have a large impact on whether the two come back into line.
Going into Treasury auctions, retail sales and the conclusion of the FOMC meeting there doesn't seem to be a clear cut direction. We would rather not speculate on what seems to be nothing more than the same odds faced by a coin toss. The S&P could see prices as high as 1026 and as low as 975 in the coming sessions. If we see 1026, I would be a bear...but as far as becoming a bull I prefer to be patient. Let's see how things play out in the coming days.
If you took the short e-mini NASDAQ as recommended in this newsletter, I hope that you were able to offset with a nice profit this morning (although it didn't quite reach our noted exit point). If not, look to lift the futures position and hold the call option (if you bought it for protection).
Futures traders, keep in mind that just because we don't put daily recommendations out on this newsletter doesn't mean that we can't help you with different and/or more aggressive strategies!
I apologize for the brevity, but I am a bit short on time. My second book is in the production stage and it has me working around the clock. I figure that if the markets don't have to sleep, neither should I!
* 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
- August 5 - We recommended to get into a more comfortable position ahead of the employment report by buying back the 925/995 August spread and selling the September 940/1045 spread for a credit of about $3.
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.
- August 3 - We recommended to buy an August at the money (1630 call) for about $600, this limits the risk of the trade to the premium paid for the option plus commissions and fees.
- August 10 - We like the idea of trying to take a profit on the futures contract near 1580.
- August 11 - If you weren't able to exit on the dip this morning, look to exit the futures shortly and hold on to the call option (if you bought it).
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
1-866-790-TRADE
Local : 702-947-0701
http://www.carleygarnertrading.com/
http://www.decarleytrading.com/
*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.
