The Stock Index Report

June 4th, 2009

Carley’s book is being featured on FXStreet.com, check it out!

Market on hold before jobs data

Equity traders were placing small, or no, bets on the Thursday before one of the most anticipated economic reports of the month.  Based on the most recent jobless claims numbers and ADP estimates of tomorrow’ release the job front seems to be stabilizing.  However, the government’s employment report will be the confirmation that the market is looking for.

If you recall, equities rallied sharply on recent news of a dramatic increase in consumer confidence.  That newly optimistic sentiment has yet to be converted into retail sales.  Retail sales were reported to have declined by 4.6%, worse than the expected 3%.  On the contrary, April same store sales were slightly higher but excluding Wal-Mart it would have marked 10 months of declines.  According to John Morris, the results are “a clear indication that the consumer is not stampeding back to the stores, they’re still being very careful.”  He added, I think the initial panic is over, but now the tough work begins.  We’re entering a slow summer period when there’s not a lot to attract consumers.”

In previous writings we mentioned that we think that a reversal in many of the major asset classes was looming (commodities, currencies and interest rates); however, today’s trade humbled us a bit.  Nonetheless, we think that in a post-nonfarm payrolls environment our predictions may become a reality.

As was the case yesterday, we believe that the overall direction of the markets will be lower in the coming weeks.  That said, we also respect the fact that a retest of the recent highs or maybe even slightly new highs could be forged on the economic data released tomorrow, or even early next week.  We like the idea of selling rallies in the coming sessions (for those of you day trading).  Option traders may want to look for opportunities tomorrow on a potential spike high to sell calls, buy puts or both.  Resistance lies at 953 in the S&P with 965 as a possibility.  If this level is seen, we don’t expect it to last.  Russell traders should look for resistance near 537 and NASDAQ bulls should be aware of an obstacle near 1505.

* 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.