It isn't uncommon to see consolidation after a large market move and that is exactly what we got on Tuesday. The stock rally was halted by a rally in the U.S. dollar and technically overbought market conditions.
The earnings reports offered by retailers were better than expected, but the good news was served with a bit of skepticism going into the holiday shopping season. Following several weeks of gains, the news provided little incentive for fresh longs. Also, the retailer revenue warnings came after the market enjoyed massive gains posted on better than expected retail sales data.
The major indices dipped in early trade, but the selling was muted and buyers were present. Although much of the buying was likely shorts taking the opportunity to cover at better prices, failure of the December S&P futures to trade below 1100 suggests that another wave of buying could be seen before a reversal can occur. That said, we still lean toward bearish strategies on rallies. Don't chase the markets lower!
We can't rule out a run to retest Monday's highs and likely reach for stops above. Look for resistance in the S&P futures near 1117 and could possibly see prices as high as1130 but we grow bearish above the first resistance. If you are trading the Russell, we would see 615ish in the next day or two at which time we would be bears. The NASDAQ begins looking like a good opportunity for the bears near 1825 but 1840 is possible.
* 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 can be applied to either the full-sized S&P or the mini. Unless otherwise noted, profit and loss will be based on the mini version.
S&P 500 Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
Position Trade -
November 11 - We recommended that our clients sell the December S&P 1160 calls for $7 or better. Some were getting fills near $6.75 others opted to continue working the order at $7.
ยท November 16 - Standing orders to sell the 1160 call for $7 were filled.
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 -
November 16 - Sell 1 December e-mini NASDAQ at 1840 OB.
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.
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