August 26th, 2008
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Little news, little action and even fewer traders.
Days like today seem to drag on forever, and that will likely be the case until after the Labor Day weekend. Commentators are clawing for something to talk about and the few traders that are active are scrambling to avoid the intraday swings that come with low volume. It is very hard to determine the path of the markets based on what we have been seeing in recent sessions but it is my job to try to make sense of it.
Home sales picked up for the month of July, but failed to meet analyst expectations. However, the increases in sales may have had something to do with the largest price drop ever in the second quarter.
On a brighter note, the Conference Board said that its consumer confidense index rose to 56.9 in July. This marketed the second consecutive gain following a six month decline.
"The overall mood is still one of caution, there's not much out there to get investors excited," according to Todd Salamone, director of trading at Schaeffer's Investment Research. He added, "But, the bigger picture is that there hasn't really been a major breakdown considering all the bad headlines out there, from higher oil prices to the credit crisis and troubles housing sector."
Most attention was focused on the Fed minutes release in quiet afternoon trade and didn't seem to change the environment much. There weren't any surprises to speak of. The Fed has lowered growth expectations for the second half of 2008 and the first half of 2009. Additionally, it is expected that inflation will tick higher as we approach year end but will actually decline in 2009. The Fed somewhat solidified that their next move will likely be a rate hike but the timing is uncertain. Most economists are expecting any moves until early next year.
I still see 1250 on the horizon for the S&P and losses in the Dow could easily extend to 11225. As long as the NASDAQ remains below 1904, the odds favor a move lower. I see the possibility of 1820.
Please note: A mini S&P chart is used because it is better for charting purposes, but trade recommendations are based the full sized S&P unless otherwise noted.
S&P Futures and Options Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
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 Futures and Options Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
Flat
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 Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
August 1 - If you took our advice, you would be long the September e-mini NASDAQ 1670 puts for about 20 points or $400.
August 12 - Not off to a great start, but things may begin to look better from here.
Carley Garner
Senior Analyst/Broker
DeCarley Trading
1-866-790-TRADE
Local : 702-947-0701
http://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.
