Carley Garner
09-15-2008, 03:52 PM
September 15th, 2008
Pre-order my book, "Commodity Options" today! Visit www.DeCarleyTrading.com for details.
Fannie, Freddie, Lehman, Merrill Lynch, AIG...I don't know how much more the market can take.
Believe it or not, today was considered by many to be a victory given the circumstances. In case you haven't already heard, Lehman Brothers filed for bankruptcy last night to squash all optimistic rumors regarding a happy ending. Friday's trade seemed to look like a market expecting a Lehman buyout or bailout, in the absence of neither stocks were left little buying interest on the open of trade Sunday afternoon. Most of the indices suffered losses of about 3%.
Perhaps the losses were somewhat mitigated as Wall Street sighed in relief over a forced sale of Merrill Lynch to Bank of America. B of A purchased the struggling investment firm for $50 billion in stock. However, the market immediately turned its head to AIG. American International Group Inc. is asking the Federal Reserve for emergency funding and plans to undergo a major restructuring. The news left butterflies in the stomachs of stock market bulls.
The selling was widespread and global. Many Asian markets were closed for a holiday, but Brittain's FTSE 100 fell over 3%, the German DAX fell nearly 3% and France's CAC-40 fell almost 4%. Both the Bank of England and the Swiss central bank made short term credit available to banks in an attempt to calm the markets.
While the markets were hopeful that the demise of Bear Sterns earlier this year would be the climax of the credit crisis, we now know that it was only the beginning. Nonetheless, the market began pricing in the implications of the crisis well before the brunt of the issues were ever felt. The forward looking nature of Wall Street may result in a market recovery prior to the credit markets regaining their health.
There is a lot of money on the sidelines and investors don't want to be left out of the long awaited equity rally. Once mutual funds and individuals finally begin putting their money to work in riskier asset classes, such as U.S. equities, the rally could be tremendous. The timing of it all and the magnitude of the current decline are in question, but I strongly believe that the outcome will eventually be positive for the domestic equity markets. After all, it doesn't pay to bet against history in the long run.
A wise trader said of today, "it is better to be a spectator than a speculator". The markets are treacherous and those without proper risk capital or the willingness to face the consequences should wait for calmer waters.
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 Futures and Options Trade Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
September 5 - Try selling the September 1160 put for $4 or better, it will take continued weakness to get filled.
September 9 - If you were trading the mini version, you should have been filled on this today. Those trading the full sized contract likely were not filled and should keep the order working in tomorrow's session. We are giving the market plenty of room to move, but this must be handled with care.
September 11 - I recommend placing an order to buy this option back for a $1 in premium, this would be a profit of $150 on each mini and $750 on each full sized before commissions and fees and assuming that you are able to get filled at the prices noted.
· This option traded at $1, but didn't go through it. You likely weren't filled, keep the order working on Monday but don't get greedy. If it costs a little more, take your profit and run.
· Hopefully you exited this trade on Friday, if so you may want to resell this option. If you are still holding on, look to exit on the next significant bounce. Preferably at $1.50 or less. Contact me for guidance.
Please note: A mini-sized Dow chart is used because it is better for charting purposes, but trade recommendations are based the full sized Dow unless otherwise noted.
Dow Futures and Options Trade Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
September 5 - Sell the September Dow 10,600 puts for 50 or better. This can be done in the mini or the full sized. Call me for additional guidance.
· September 15 - This order should have been filled today. Look to buy this back for 10 or better! Don't get greedy, if we get a large bounce take a profit. There may be a chance to resell it.
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 Trade Recommendations
**There is unlimited risk in naked option selling and futures trading
Swing Trade -
Buy 1 December Mini NASDAQ at 1705
Position Trade -
August 1 - If you took our advice, you would be long the September e-mini NASDAQ 1670 puts for about 20 points or $400.
August 12 - Not off to a great start, but things may begin to look better from here.
September 4 - These may come back to life!
September 5 - Place an order to sell this put for 20 or better in an attempt to get your money back...
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701
www.DeCarleyTrading.com
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.
Pre-order my book, "Commodity Options" today! Visit www.DeCarleyTrading.com for details.
Fannie, Freddie, Lehman, Merrill Lynch, AIG...I don't know how much more the market can take.
Believe it or not, today was considered by many to be a victory given the circumstances. In case you haven't already heard, Lehman Brothers filed for bankruptcy last night to squash all optimistic rumors regarding a happy ending. Friday's trade seemed to look like a market expecting a Lehman buyout or bailout, in the absence of neither stocks were left little buying interest on the open of trade Sunday afternoon. Most of the indices suffered losses of about 3%.
Perhaps the losses were somewhat mitigated as Wall Street sighed in relief over a forced sale of Merrill Lynch to Bank of America. B of A purchased the struggling investment firm for $50 billion in stock. However, the market immediately turned its head to AIG. American International Group Inc. is asking the Federal Reserve for emergency funding and plans to undergo a major restructuring. The news left butterflies in the stomachs of stock market bulls.
The selling was widespread and global. Many Asian markets were closed for a holiday, but Brittain's FTSE 100 fell over 3%, the German DAX fell nearly 3% and France's CAC-40 fell almost 4%. Both the Bank of England and the Swiss central bank made short term credit available to banks in an attempt to calm the markets.
While the markets were hopeful that the demise of Bear Sterns earlier this year would be the climax of the credit crisis, we now know that it was only the beginning. Nonetheless, the market began pricing in the implications of the crisis well before the brunt of the issues were ever felt. The forward looking nature of Wall Street may result in a market recovery prior to the credit markets regaining their health.
There is a lot of money on the sidelines and investors don't want to be left out of the long awaited equity rally. Once mutual funds and individuals finally begin putting their money to work in riskier asset classes, such as U.S. equities, the rally could be tremendous. The timing of it all and the magnitude of the current decline are in question, but I strongly believe that the outcome will eventually be positive for the domestic equity markets. After all, it doesn't pay to bet against history in the long run.
A wise trader said of today, "it is better to be a spectator than a speculator". The markets are treacherous and those without proper risk capital or the willingness to face the consequences should wait for calmer waters.
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 Futures and Options Trade Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
September 5 - Try selling the September 1160 put for $4 or better, it will take continued weakness to get filled.
September 9 - If you were trading the mini version, you should have been filled on this today. Those trading the full sized contract likely were not filled and should keep the order working in tomorrow's session. We are giving the market plenty of room to move, but this must be handled with care.
September 11 - I recommend placing an order to buy this option back for a $1 in premium, this would be a profit of $150 on each mini and $750 on each full sized before commissions and fees and assuming that you are able to get filled at the prices noted.
· This option traded at $1, but didn't go through it. You likely weren't filled, keep the order working on Monday but don't get greedy. If it costs a little more, take your profit and run.
· Hopefully you exited this trade on Friday, if so you may want to resell this option. If you are still holding on, look to exit on the next significant bounce. Preferably at $1.50 or less. Contact me for guidance.
Please note: A mini-sized Dow chart is used because it is better for charting purposes, but trade recommendations are based the full sized Dow unless otherwise noted.
Dow Futures and Options Trade Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
September 5 - Sell the September Dow 10,600 puts for 50 or better. This can be done in the mini or the full sized. Call me for additional guidance.
· September 15 - This order should have been filled today. Look to buy this back for 10 or better! Don't get greedy, if we get a large bounce take a profit. There may be a chance to resell it.
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 Trade Recommendations
**There is unlimited risk in naked option selling and futures trading
Swing Trade -
Buy 1 December Mini NASDAQ at 1705
Position Trade -
August 1 - If you took our advice, you would be long the September e-mini NASDAQ 1670 puts for about 20 points or $400.
August 12 - Not off to a great start, but things may begin to look better from here.
September 4 - These may come back to life!
September 5 - Place an order to sell this put for 20 or better in an attempt to get your money back...
Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701
www.DeCarleyTrading.com
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.