The Stock Index Report

June 16th, 2009

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VIX in the spotlight again

A positive reading on housing starts and building permits triggered a small wave of early morning buying but overseas weakness and mixed economic news prevented the move from becoming more than an oversold bounce.

We mentioned last week that the stagnant volatility wasn’t going to last.  This week it seems as though traders are embracing it.  According to our sources, speculators and even large investment houses were getting on the long side of volatility through the purchase of VIX call options and call spreads.  Buyers are using the August and September options, meaning that they think that it could be a rough summer for equities.  This is something that we have suspected as well, but the relentless early summer trade has proven many wrong thus far.

Coming into today, we were expected a decent sized bounce from what we had deemed to be considerably support on the daily chart.  However, the upside momentum was a disappointment and the S&P has settled beneath our critical pivot level of 917.  This leaves us on the fence in terms of near-term direction.

If you are trading the S&P, look for weakness to continue as long as the market closes beneath 917.  Above such areas, however, the bulls may have an edge.  Major resistance lies at 957 and support at 877.  We will refrain from making any bold calls until things clear up a bit.

The NASDAQ on the other hand, managed to remain above its major pivot area near 1445.  If tech stocks are still the leader, this may be significant for the bulls.  In the meantime, intermediate term resistance can be found near 1538 and support near 1350.  The “make or break” area for the Russell appears to be 504.

* 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 -

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.