December 12th, 2008

Happy Holidays from DeCarley Trading!

Stocks rally in the face of political turmoil.

Friday's overnight plunge and subsequent rally suggests that the equity markets are "healthier" than many assumed.  Today's gains were forged despite chaos in Washington and news of a multi-billion dollar ponzi scheme on Wall Street.  At a time in which many have lost trust in the system, this could have been a near disaster. 

As we have mentioned in this report, we believe that Wall Street is more concerned with knowing the outcome of the auto-bill than it is the actual result.  Markets don't like uncertainty, and there is a lot to be uncertain about concerning the future of the big three and the impact on the rest of us.  At its worst overnight levels, both the Dow and the S&P managed to prevent a complete meltdown.  With that said, it was likely the Bush administration stepping in to rescue the automakers that allowed the trading day to end on a positive note.  If progress can be made by Monday or Tuesday, the markets may be poised for a nice holiday rally.

We were right to assume that the markets would spend Thursday and Friday back and filling the recent gains, but we weren't anticipating the depths of the pullback.  Nonetheless, the major indices look to have positive technical setups and should head higher in the near term.  Additionally, the next few weeks are statistically bullish based on historical standards and light volume may exaggerate the buying.  Our first objective in the March S&P is 931, the Dow should find its way up to 9,065 and we are expecting the NASDAQ to see 1253 in the coming sessions. 

Have a nice weekend!

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 –

November 12 - Our clients were advised to buy the December e- mini S&P 500 1030 calls for $6 in premium or $300. 

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 Jones Futures and Options Trading Recommendations

**There is unlimited risk in naked option selling and futures trading

Position Trade –

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

Swing Trade -

There is substantial risk of loss in trading futures and options.