February 12th, 2009

See DeCarley Trading's "Trade Like a Girl" article in the March issue of Stocks Futures and Options Magazine!

Stocks rebound as S&P futures refuse to break 800   

It was a relatively hectic day, so I will keep today's commentary short and sweet. 

After what seemed like a desperate day for equities, the major indices forged a strong comeback in late session trade.  The buying was triggered by oversold market conditions but was fueled by news that the Obama administration was working on a plan to subsidize mortgage payments for troubled homeowners. 

Analysts, and apparently the market, find comfort in the new plan in that it will be structured to help homeowner's before they fall into arrears on their loans.  This is in contrast to existing programs that aren't relevant until borrowers are delinquent. 

We may or may not have found a long-term low in the stock indices, but I do feel confident that we will see another day or two of follow through buying.  Today's key reversal should be enough to shake up the bears.  The first area of resistance in the S&P is 837, but beyond that it looks like we may be headed back to 875.  The Dow managed to hold 7,800 (despite an intraday dip much lower) telling me that we should see prices above 8,042 and possibly 8,311 shortly.  Our upside target in the NASDAQ is 1278.

Some of those trading with us purchased the February 845 calls on the dip for $6.25 in premium.  Later in the day we were able to sell them for as much as double, a $312.50 profit before commissions and fees, less than 2 hours later (naturally they don't all turn out this well).  We may be looking to put them back on if the market dips a bit tomorrow. 

If you like what you see on this newsletter and would be interested type of trading or intraday and swing trading futures, give us a call.  Not all of our recommendations make it onto the newsletter in a timely fashion due to fast paced markets.  We would love to work with you and accept accounts of all types and sizes. 

* 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.

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 –

Flat

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 –

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 –

Flat

*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.