December 29th, 2008

Happy Holidays from DeCarley Trading!

Low, make that no, volume...stay away from the markets.

There is a reason why brokers, traders and other industry insiders take their vacations in December; low volumes.  It isn't difficult to imagine that given market volatility and a turbulent economy trading volume has never been so low.  In overnight Globex trade before Friday's trading session there were barely 100 contracts traded.  The day session wasn't much better, there were less than 500 NASDAQ futures traded on the day.

There was very little economic news to guide trade, unfortunately Middle East tensions filled the void.  Continued violence overseas didn't give investors confidence going forward as the markets will have to overcome economic shortfalls as well as geo-political. 

Like last week, the trading hours will be limited as we enter the New Year.  Some of the markets will trade an abbreviated session on Wednesday; however, the stock indices will be open the entire session.  Thursday, on the other hand will be dark (for those of you that don't live in Las Vegas, dark is synonymous with closed).  All futures markets will be open for a full day of trading on Friday, but I suspect that there won't be too many traders there to participate. 

I don't have a strong opinion in the direction of the market in the coming days and prefer to wait until volume picks back up to begin making predictions.  With that said, my friends on the floor are looking for the lack of liquidity to support a drift higher in the indices...and they tend to be right much more than they are wrong. 

Look for resistance in the S&P near 870 and again at 912; major support should be found near 842.  Heavy support in the Dow won't be found until 8,290, in the meantime resistance is near 8,480 and then again near 8,875.

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.