The Stock Index Report

July 2nd, 2009

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Stocks slump on jobs data

Equities suffered from low volume and poor economic news on the last trading session before the 4th of July celebration.  Rumors of a possible North Korean attack on Hawaii, although not necessarily credible, also worked against the markets.

Our prediction that traders would disappear shortly after the release of non-farm payroll numbers seemed to be relatively accurate.  Volume was at a bare minimum in post-announcement trade.  The headline numbers weren’t a big surprise; an estimated 467,000 jobs were lost last month to bring the unemployment rate to about 9.5%.  It is important to note that the so called U-6 number, which includes those that have stopped looking for work or who can’t find full-time jobs, has climbed to nearly 16%.  Suddenly, the green shoots look a little brown.  Nonetheless, most of this was expected well before today and therefore the initial reaction looks to be a bit exaggerated by the lack of market liquidity.

The major indices posted losses of nearly 2% by mid-session, while the Russell was down over 3%.  The Russell is comprised of small cap stocks, which are often the market leaders.  I wouldn’t put too much credence into today’s trade in light of the volume situation, but it seems that even if we see an oversold bounce on Monday the overall trend is lower.  We think that the next target in the September S&P is the mid-to low 880’s.  In the case of the Russell, 2000 the mid-480’s should be the next target and we expect that the NASDAQ could see the 1420 area again in the near future.

For the most part, the markets will be closed tomorrow in observance of the holiday.  With that said, the CME Group Globex stock indices (e-mini S&P, e-mini NASDAQ and e-mini Dow) will trade overnight as usual but the session will be halted at 10:30 am Central.

Enjoy your holiday weekend!

* 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.