Stocks made their way moderately higher but appear to have lost (at least some of) its momentum. Analysts have questioned the rally from day one, but the market continues to prove dissenters wrong. David A. Rosen berg, the chief economist at strategist for Gluskin Sheff, believes “The market is as overvalued now as it was undervalued a year ago.” He added, “There is a very high degree of complacency.” As we have noted in the past, complacency can sometimes lead to a sizable correction.
Another bearish opinion, Jeffrey A. Hirsch, editor of “The Stock Trader’s Almanac” believes that the market has priced in a better recovery than what could be the case. According to reliable sources, he is predicting a 20 to 30 percent decline before the markets can move higher.
In the near-term, investors successfully shook off news of a Russian terror attack and are eagerly awaiting Friday’s non-farm payroll figures. Expectations have set a high bar with optimistic estimates ranging from 75,000 to 200,000. Keep in mind that the employment report will be released on Good Friday, the open outcry futures pits will be closed and electronic futures will have an early close. Accordingly, trade could be very thin and reaction to the data could be exaggerated.
We see resistance near 1177 through 1184 in the S&P; if you are trading the NASDAQ, key areas will be 1975 and 1995 and near 695 in the Russell.
* 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 –
February 19 – Our clients were advised to sell the April 1165 calls for about $7.50, fills were coming in near $7.25 and a handful at $7.50.
March 5 – Clients with ample margin and guts, were recommended to add to this position by selling the 1165 calls for $9.50.
March16 – Clients were advised to roll half of their short call position into the April 1185/1100 strangle.
March 17 – Clients were advised to roll the remaining 1165 calls into the May 1190 calls to give the market some breathing room.
Russell Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade –
March 9 – Sell 1 June mini Russell @ 682 OB
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 –
March 3 – Sell 1 e-mini NASDAQ at 1878 or better
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701
http://www.DeCarleyTrading.com
http://www.ATradersFirstBookonCommodities.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.
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