May 14th, 2008
**Be sure to see my monthly column "Futures for You" in Stocks and Commodities!!!
Stock traders entered the day with a positive attitude and the momentum was fortified by a supportive CPI reading. Inflation worries have been put on the back burner (for now) but I don't think that anyone believes that price pressure doesn't exist. We all know that the CPI index has its flaws and maybe now more than ever those flaws are being exposed.
According to the Labor Department, the April consumer prices rose at a pace of .2% after an incline of .3% in March. There seemed to be a lot of anxiety surrounding the possibility of a spike in prices as a direct result in the recent rally in crude oil. It is obvious that businesses are absorbing some of the inflation and it has yet to completely trickle down to the consumer level. However a recent trip to the grocery store seemed to contradict this theory.
The dollar was mixed but managed to stabilize. This feat is much more promising that it seems on the surface and if it continues we may begin to see the stock market benefit from foreign investments.
In an email from my friends at DT Trading on the S&P floor, an interesting fact was brought to my attention. I only wish that I would have had this information earlier in the year...I may have had more confidence in put selling (although if you follow this report you know that things worked out relatively well). Without exception, in years ending in 8 (1928, 1938...2008?), the stock market has made its low in the first quarter.
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 - Sell 1 Dow 135 call for 50 or better (this can be done with the mini contract)
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 - Sell one Mini contract at 2035OB
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.
