May 12th, 2008
**Be sure to see my monthly column "Futures for You" in Stocks and Commodities!!!
The doom and gloom from late last week failed to carry into the new week. With option expiration approaching and a statistically positive market from now until Wednesday, we may see a continuation of this rally after all. Aside from holding the technical uptrend, investors likely let their guard down due to slightly softer crude prices and better greenback valuations.
The dollar's progress vs. other major currencies seemed to ease concerns over inflation; however, last month's CPI data will be released on Wednesday morning. This time around the potential for a volatile reaction seems to be increased.
Positive earnings from global banker HSBC and comments made by JPMorgan's CEO gave investors confidence in regards to the credit crunch. HSBC reported that its first quarter earnings beat those of a year ago, while Jamie Dimon of JPMorgan claims that credit crisis is about 75% over.
Given today's action, I am looking for the Dow to reach levels as high as 13,110 in the near future. Likewise, the Nasdaq futures should find resistance near 2032. Whether you are on the bull bandwagon or not, you should realize that it doesn't pay to fight City Hall. If the market is going to go higher, let it. Picking a top with futures doesn't pay but selling calls against it may. I may be looking to sell OTM calls on a spike up to 13,100...stay tuned.
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.
