April 1, 2009

Catch me on Facebook!

Is the market playing a Bad April Fool's joke?

The most recent 24 hours of market action look more like a bad April Fool's joke than a free market.  The moves have been swift and unforgiving for both the bulls and the bears, leaving even the best analysts uncertain as to where the market may go from here.  Rather than pretend to be something that I am not, or capable of something that I am not I have vowed to take a step back from speculating on price direction until the smoke clears.  I am hoping for more reliable market action as G20 events unfold and Friday's employment data is released. 

April in general has historically been a strong month for the market, specifically the Dow.  Specifically, early April is known for strength but the sharp selling is possible prior to the April 16th tax deadline as taxpayers scramble for cash.  With this in mind, we could see a near-term temporary rally.

In a perfect world, we would see a sharp rally that brings the S&P to 850 or slightly above.  Not only will this temporarily help my (and yours) slumping retirement account but it will also provide what I believe to be a great opportunity to sell call premium, or for more aggressive traders, even look to get on the short side of futures contracts. 

777 seems to be pivotal for the S&P (and not it isn't because I am from Vegas), a break below it could mean 765 in short order.  At this time, we aren't expecting a break below such levels.  I am actually leaning higher, I see potential for 850 and maybe even 860 before the bears are able to take over.  Support in the Russell 2000 futures can be found at 409 and again near 398, resistance on the upside should be found at 435 and again at 457.

* 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-Russell chart is used because it is better for charting purposes, trade recommendations will denote whether a mini or full sized contract should be used.

Russell 2000 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.