The Stock Index Report
by Carley Garner
| Date: 03/09/10 | Estimated Update: 03/10/10 |
|---|---|
| Phone | 1-866-790-TRADE |
| E-Mail: | cgarner@DeCarleyTrading.com |
| Website: | www.DeCarleyTrading.com
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Call Activity in VIX Suggests Looming Equity Correction
You know it is a slow news day when CNBC anchors are talking over the sound of a fire alarm (appearantey they were conducing a fire drill in the buildng during broadcast hours). Volume was about half of the average and price action showed it. Another round of merger and acquisition news kept sellers at bay and the bulls in control. With so called "mutual fund Monday" behind us, it will be up to the fundamentals to keep this market afloat and that seems to be a daunting task.
AIG agreed to sell one of its foreign divisions to Metlife Inc for $15.5 billion. This isn't necessarily new information, but the confirmation of the deal had a positive impact on trade.
The current rally appears to be a delayed reaction to an overall positive earnings season combined with massive short covering. While it is hard to build a bullish sentiment on short covering, it is also difficult to determine how high the short squeeze can go. Market tops and bottoms tend to be volatile, not the quiet trade that was witnessed on Monday. As a result, the odds seem to favor a little more strength before a correction can materialize. Some analysts we communicate with believe that the market is in the process of forming a "blow-off" top but the same analysis suggests that 1165/1170 could be seen before the reversal.
There is some resistance in the S&P near 1138 but 1148 seems very possible target before a reversal can occur. The NASDAQ is facing resistance near 1900 and again at 1921and in the Russell this equates to about 669 and then again near 682. We are looking for the former to hold, but can't rule out a move to the latter so you want to make sure that you reserve some of your "ammo".
* 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 Recommendations
**There is unlimited risk in naked option selling and futures trading.
Position Trade -
Flat
Please note: A mini-sized Russell 2000 Index chart is used because it is
better for charting purposes, but trade recommendations are based the
full sized Dow unless otherwise noted.
Russell Futures and Options 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.
Mini NASDAQ Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures
Position Trade -
December 28 - Sell 1 mini NASDAQ near 1879
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.
