July 7th, 2009

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Waiting for earnings season…

It is a slow news week, but traders are gearing up for tomorrow’s G-8 meeting and the upcoming earnings season. We will hear from Alcoa and Pepsi Bottling tomorrow but it is next week that traders are looking forward to.

Don’t forget that the historical tendency for earnings season suggests that stocks outperform before and suffer from disappointment after the fact. This is similar to a buy the rumor, sell the fact type of scenario that often plays out in markets. However, it seems as though some of the selling has come early this time around and the price pressure may not over yet.

Crude oil dropped for the fifth consecutive day and seems to be dragging equities down with it. Nonetheless, it is difficult to see if the dog is wagging the tail or the tail wagging the dog. In both cases, we are approaching oversold conditions but this is more true of crude than equities. While our models are pointing toward the potential for a bounce from here, we still think moderately lower before this can happen. We have been calling for the mid-to low 70’s in the S&P and despite today’s valiant attempt at reaching our target, we feel like there is a bit more downside and will continue to look for such levels. Our clients were recommended to sell the August 760 puts for about $6.50 in late day trade.

If you are trading the Russell or the NASDAQ, we are still looking for 468 and 1390 in the September contracts. Because the NASDAQ was the strongest on the way up, it could be the hardest hit on the way down. We would refrain from overly bullish holdings in this market. However, aggressive Russell traders may look to put on bullish positions at or near our noted target.

* 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 are based the full sized S&P unless otherwise noted.

S&P 500 Futures and Options Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat

Russell Futures and Options Trading 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 Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade -

Flat

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Carley Garner

Senior Analyst / Commodity Broker

DeCarley Trading

cgarner@DeCarleyTrading.com

1-866-790-TRADE

Local : 702-947-0701

www.CarleyGarnerTrading.com

www.DeCarleyTrading.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.