The Stock Index Report

“Commodity Options” is now available at TradersLibrary.com!

Stocks soar, but tomorrow may be different

After what seemed to be a quiet open, trade quickly turned into a mass of buy programs.  According to our sources, short covering triggered buy stops then the sharp reversal triggered technical buy programs…and the rest is history.

The buying was said to be attributable to homebuilder and retail stocks.  Homebuilding shares benefited from an announcement by Lennar Corporation reporting that orders for new homes had jumped 63% during the second quarter.  Bed Bath & Beyond gave a boost to customer discretionary stocks after reporting that its first quarter profit climbed 14% thanks to overflow business from rival Linens N Things.

On the economic front, claims for unemployment benefits rose by 15,000 to 627,000 last week.  More significantly, 1st quarter GDP was reported at a negative 5.5%.  The print was better than expected but didn’t paint a positive picture for the economy.

Some of the market volatility was likely due to the day’s events in Washington.  Ben Bernanke spent the day being questioned by Congress in regards to the Bank of America Merrill Lynch deal that cost taxpayers $20 billion.  The Fed chair claims, “I did not tell Bank of America’s management that the Federal Reserve would take action against the board or management”, in regards to questions regarding the “forced” merger of the firms.

In our last newsletter we mentioned that the S&P can bounce as high as 920 without compromising the bears.  Today’s high of 917ish was significant, and while a retest of the highs and maybe even 921 are possible in Friday’s session we feel as though failure to close above these levels will lead to another wave of selling going into next week.
We see strong resistance in the Russell near 507 and 8,544 in the Dow.  The NASDAQ remains the strongest of the major indices, but we see resistance near 1482.

This report was written a little earlier than usual, but the analysis should still be relatively current.  I am speaking at a CFA (Certified Financial Analyst)  event tonight, so time is a little scarce.

* 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 -

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Russell Futures and Options Trading Recommendations

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

Position Trade -

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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 -

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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.