November 30th, 2009
Look for our market outlook quoted in the December issue of Futures Magazine!
So much for the Thanksgiving rally!
We have been reminding readers of the infamous Thanksgiving rally for weeks but this year it just wasn't meant to be. A poorly timed announcement in regards to a plea for a Dubai debt restructure sent equities swooning in thin holiday trade.
While many American's naively assumed that because the New York Stock Exchange was closed for business their equity holdings weren't changing value, the futures markets were in panic mode. At one point in overnight futures market trade, the S&P was down nearly 50 handles from its close on Wednesday. Luckily, the markets quickly gathered composure and ended Friday's session with hefty but not crippling losses.
In our opinion, the market's reaction to the Dubai World news was grossly exaggerated by the holiday. Had the announcement come during a more "normal" trading session things might not have been nearly as volatile. Additionally, it is likely that many traders that were long the markets placed their sell stops ahead of the holiday weekend leaving the market vulnerable to large and irrational moves on sell stop running. In the larger scheme of things, the markets have failed to trade on fundamentals in recent months and that trend seems to be intact.
The dust has yet to settle from last week's events and therefore it is difficult to pick a near-term direction. However, the pivot point in the S&P is 1085 and until the December futures settles below this the bulls have an edge. Similarly, the NASDAQ pivot is 1760 and support in the Russell lies at 558. Unless the bears can penetrate and hold prices below noted levels the next move might be higher. If you recall, prior to the Dubai surprise we were looking for a move to 1030 in the S&P, 1840 in the NASDAQ and as high as 625 in the Russell.
Here are a few comments from our friends located on the CME floor:
http://clicks.aweber.com/y/ct/?l=ON6zJ&m=1gbpOXBoicFgzm&b=8J2n90RWWJTs1Ari2Ts6Pw
* 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 -
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
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.
