The Stock Index Report - Bulls come out on top...
Carley Garner I Alaron Research - 30 July 2010
The stock rally is in jeopardy but the bulls aren't giving up easily. Despite bearish seasonals and a string of questionable economic data, the equity meltdown that some were looking for hasn't materialized.
Friday was a finicky session. Stock index futures dropped sharply on news of a slightly worse than expected GDP rate of 2.4%. It seems to have been the "sticker shock" of the drop from 3.7% to the current rate that sent some into panic mode. However, the Chicago PMI and University of Michigan Sentiment suggested that sluggish and Armageddon were two different things. Accordingly, futures made their way back toward unchanged and this is where they spent most of the day. However, a late day short squeeze forced the major indices well into positive territory.
Thin volume and highly indecisive trade on Friday to close the week didn't offer any helpful insight as to the near-term direction so we would like to see Monday's action before attempting to predict the next chop-fest bias. In the meantime, look for support in the S&P near 1077...this could be where bulls and bears will meet their fate. Similar levels in the Russell will be 627 and near 1820ish. We have been looking for a move to resistance in the mid 1120's for weeks, will it finally happen?
Earnings season might be coming to a close, but there will be plenty of economic releases to fill the void. We start the week with construction spending, ISM services and manufacturing index, and of course the elephant in the room, the non-farm payrolls.
Sorry to be so wishy-washy...but there isn't much to say about this action. Let's see what next week brings, enjoy your weekend.
* 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
Flat
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
DeCarleyTrading.com
CarleyGarnerTrading.com
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.
About the Author:
Carley Garner - Senior Market Analyst and Broker, Stocks & Commodities Magazine Columnist and Author - Carley Garner is a Magna Cum Laude graduate of the University of Nevada Las Vegas, from which she earned dual bachelor’s degrees in both Finance and Accounting. Carley jumped into the options and futures industry with both feet in early 2004 and has become one of the most recognized names in the business. Throughout her fast paced career, Carley has been featured in the likes of Stocks and Commodities, Futures, Active Trader, Option Trader, Your Trading Edge, and Pitnews Magazine. Carley is often interviewed by news services such as Reuters and Dow Jones Newswire, and has been quoted by the Investor’s Business Daily and the Wall Street Journal. She has also been known to participate in Radio interviews. Carley's book titled “Commodity Options” was published by FT Press, a division of Prentice Hall, and is now available through all major book outlets. She has recently completed her second book, which is slated to be available in early 2010. Her e-newsletters The Stock Index Report and the Bond Bulletin are widely distributed and have garnered a loyal following; she is also proactive in providing free trading education, for details visit http://www.carleygarnertrading.com/. To register for a complimentary subscription to her daily newsletters, the Stock Index Report and the Bond Bulletin, visit www.DeCarleyTrading.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. 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. |
