May 8th, 2008
**Be sure to see my monthly column "Futures for You" in Stocks and Commodities!!!
After a relatively choppy session the major stock indices managed to pull off an overall neutral day despite yesterday's dismal trade. As disheartening as yesterday was for the bulls, the up-trend remained in tact and we are approaching two statistically strong trading sessions. Friday, Tuesday and Wednesday are all considered to be historically bullish days according to the Stock Trader's Almanac.
The economic calendar was light, with the weekly jobless claims and wholesale inventories being the story of the day. Normally these reports are buried in the background of more relevant information. Tomorrow will bring trade balance data, but will likely be quiet trade thereafter. An early weekend may be in store for many traders.
From a technical standpoint, the Dow looks to be trapped within a slightly inclining up-trend channel. Assuming that 12,769 holds, I am expecting a rally to 13,188. If I am wrong, a quick (and painful) plunge to 12,349 is possible. The VIX is trading at the lowest levels seen in several months and we may be due for a spike in volatility. If you are a short option trader, I suggest being patient. There will likely be a much better opportunity to sell premium in the upcoming days or weeks.
Please note: A mini-sized Dow chart is used because it is better for charting purposes, but trade recommendations are based the full sized Dow unless otherwise noted.
Dow Recommendations...
**There is unlimited risk in naked option selling and futures trading
Position Trade -
April 18th - My clients were advised to sell May Dow 133 calls for 50 or better (this can be done with the mini options or the full sized).
- April 29th - Place an order to buy this back for 15 or better
- o You should have been filled at 15 for a profit of 35 points before considering transaction costs!!
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 Recommendation
**There is unlimited risk in naked option selling and futures trading
Position Trade - Flat
Carley Garner
Alaron Research Team
800.935.6492
cgarner@alaron.com
http://www.commoditytradingschool.com/
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. Alaron Trading Corp. its officers, directors, employees and brokers may in the normal course of business have positions, which may or may not agree with the opinions expressed in this report. 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.
