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Bernanke takes back QE3!

July 14th , 2011
 
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Bernanke takes back QE3!
 
For those that read our commodity newsletter, The DeCarley Perspective, you might recall that we mentioned the fact that Bernanke simply mentioned the possibility of more stimulus.  Unfortunately, some quick triggered traders (namely metals) saw this as a reason to begin pricing in more quantitative easing.  However, after having a night to sleep on it the Fed Chairman opted to clarify by noting that additional security purchases (money printing) weren't probable. 
 
In the short run, the market saw this as a negative but I think as the news sets in over the next few days, traders might feel differently.  After all, if the Fed doesn't things are bad enough to step in and implement another backstop...maybe they really are getting better. 
 
Although you wouldn't know by looking at the quote board, today's events were overall bullish for equities.  For instance, this morning's PPI hinted toward tame inflation (although we all seem to feel otherwise), stable retail sales and a slightly better jobs market. 
 
For now, we are working on the assumption that earnings will continue to meet or beat expectations and the market will therefore hold recent lows (or at least in the vicinity.    For instance, support in the S&P just under 1300 should be good for now.  Similarly, the Russell should find a way to hold above 815ish and the NASDAQ above 2300.  These levels can be looked at as a place to nibble on longs. 

 
* 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.   

**Seasonality is already factored into current prices, any references to such does not indicate future market action.
 
Please note: An e-mini S&P and e-mini NASDAQ chart are used because they 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.
 
Futures and Options Trading Recommendations
**There is unlimited risk in naked option selling and futures trading
 
Position Trade -  
 
July 7 - Clients were advised to sell the August 1385 calls in the e-mini S&P for $8.00 or better.  Fills were reported between $8.00 and $9.00. 
 
July 11 - Clients were advised to take a quick profit on their short 1385 calls near 3.70, fills were reported as low as 3.15.  This leaves a per contract profit before transaction costs of about $215 to $280ish, depending on fills. 
 
In other markets....
 
July 11 - Clients were recommended to sell the August Euro 132 puts for about 28 ticks in premium, or $350.
 
July 11 - Clients were recommended to sell the August Euro 132 puts for about 28 ticks in premium, or $350.
 
July 12 - Clients were recommended to sell the August Yen 129.50 call for about 28 ticks ($350).
 
(Our clients receive short option trading ideas in other markets such as gold, crude oil, corn, soybeans, Euro, Yen, and more.  Email us for more information)
 
 

Carley Garner
Senior Analyst / Commodity Broker
DeCarley Trading
cgarner@DeCarleyTrading.com
1-866-790-TRADE
Local : 702-947-0701
 
 

*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.