David Hall Commodities » Stock Indexes

MARCH MINI S&P INDEX–12/31/2009

traderfutures — Thu, 31 Dec 2009 14:38:12 +0000

The March Mini S&P Index is up 1.50 points at 1123.50 this morning as I write. The included chart shows that the S&P index continues to edge higher, seemingly every day, relentlessly as many analysts continue to look for corrections, every day, relentlessly. I will begin to worry when the analysts quit expecting corrections every day. The other way to look at this is that as long as the Fed has a zero interest rate policy and short term rates are less than 1%, there really aren’t any other good alternatives to get a return on your money outside of the stock market. Stock market values can go up for a long time under this scenario. The directional movement indicators are bullish and the ADX line is edging higher. I recommend holding current positions.

Followers of this letter should be:

Long one March Mini S&P (1190.00 strike) call option from 17.00 points and short 2 March Mini S&P (1220.00 strike) call options from 9.50 points each for a total credit of 2.00 points or $100 gross.

Long one March Mini S&P (1000.00 strike) put option from 23.00 points and short 2 March Mini S&P (935.00 strike) put options from 12.75 points each for a total credit of 2.50 points or $125 gross.

Long one March Mini S&P futures contract from 1125.50 and short one March Mini S&P (1080.00 strike) call option from 70.75 points. (This is a deep in-the-money covered write trade.)

March Mini S&P options expire in 78 days.

David Hall

The information and opinions contained herein comes from sources believed to be reliable, but are not guaranteed as to accuracy or completeness. The risk of loss in trading futures and/or options can be substantial. Each investor must consider whether this is a suitable investment. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results.

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/30/2009

traderfutures — Wed, 30 Dec 2009 15:04:42 +0000

The March Mini S&P Index is down 1 point at 1121.00 this morning as I write. The included chart shows that the S&P index continues to steadily work its way higher in price. This slow pace of a rally is driving some analysts nuts as they have all be expecting and hoping for a 10% or more correction for months, only to see small pull backs that lead toward rallies to higher highs. I believe that this current rally in the stock market will continue until most of these for mentioned analysts finally throw in the towel and get long. Major market turns or major corrections usually happen when not many people are looking for them, or when investors become so complacent that they say they aren’t worried about a correction because they are confident that they will just buy more stocks before the stock go higher in price. That is certainly not the case right now which leads me to believe that higher stock prices are ahead for awhile until the psychology changes. A major news event could always change everything, but trying to trade markets on major, rarely occurring, news events is not a good way to consistently make money. We could trade the markets on expectations of the end of the world, but that event never happens, and if it ever did, who would care anyway? I am content to hold on to our newly placed deep in-the-money covered call write trade, along with our ratio call and ratio put spreads.

Followers of this letter should be:

Long one March Mini S&P (1190.00 strike) call option from 17.00 points and short 2 March Mini S&P (1220.00 strike) call options from 9.50 points each for a total credit of 2.00 points or $100 gross.

Long one March Mini S&P (1000.00 strike) put option from 23.00 points and short 2 March Mini S&P (935.00 strike) put options from 12.75 points each for a total credit of 2.50 points or $125 gross.

Long one March Mini S&P futures contract from 1125.50 and short one March Mini S&P (1080.00 strike) call option from 70.75 points. (This is a deep in-the-money covered write trade.)

March Mini S&P options expire in 79 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/29/2009

traderfutures — Tue, 29 Dec 2009 15:08:41 +0000

The March Mini S&P Index is up 1.50 points at 1124.50 this morning as I write. The included chart shows the current reluctant uptrend continue to trudge higher. These kinds of bull moves can last for long periods of time as I have mentioned in past letters. There are still too many analysts looking for corrections and no one that I know of is complacent about the market. Remember, major tops happen when everyone is complacent about the market and only predicting how high the market is going to go and no one is worried about corrections. That is not the case right now. I still look for this stock market to continue to work higher. The directional movement indicators are bullish and the ADX line is rising. Yesterday, following my recommendation, we bought one March Mini S&P futures contract at 1125.50 and sold one deep in-the-money March 1080.00 strike call option at 70.75 points. This means that in 80 days when the option expired, if the March Mini S&P closes above 1080.00 then our short call option will be exercised. The result would be a futures loss of 45.50 points (the difference between 1080 and 1125.50), but we would keep the option premium of 70.75 points, so the overall result would be a gross gain of 25.25 points or $1262.50. I did the trade this way so that we have a lot of downside protection and the expectation that stock index prices will continue to rise very slowly over time. I do not expect to wait until expiration to liquidate this trade. Over some time, if prices work higher and begin to stall, I will probably take whatever profit is available at the time and liquidate. By the way, the 1080.00 level is a very important price level to hold for this bull move. Don’t forget that we also have both ration call and ratio put spreads to attempt to take advantage of larger bull or bear moves should they take place in the intermediate term. If those types of trends don’t occur within the expiration time, no problem, because we did those spreads for credits anyway.

Followers of this letter should be:

Long one March Mini S&P (1190.00 strike) call option from 17.00 points and short 2 March Mini S&P (1220.00 strike) call options from 9.50 points each for a total credit of 2.00 points or $100 gross.

Long one March Mini S&P (1000.00 strike) put option from 23.00 points and short 2 March Mini S&P (935.00 strike) put options from 12.75 points each for a total credit of 2.50 points or $125 gross.

Long one March Mini S&P futures contract from 1125.50 and short one March Mini S&P (1080.00 strike) call option from 70.75 points.

March Mini S&P options expire in 80 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/28/2009

traderfutures — Mon, 28 Dec 2009 14:40:14 +0000

The March Mini S&P Index is up 2.75 points at 1124.75 this morning as I write. The included chart shows that the S&P index continues to sludge forward to the upside. The directional movement indicators are bullish and the ADX line is beginning to rise. What can I say, this is bullish action. Since the 1080.00 area seems to be where the recent lows held, here is a trade recommendation. I recommend buying one March Mini S&P futures contract right here, and then selling one March S&P 1080.00 strike call option a current prices as well. This is a deep in the money covered call write trade that gives us a lot of downside protection.

Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

You should also be long one March Mini S&P (1000.00 strike) put option from 23.00 points and short 2 March Mini S&P (935 strike) put options from 12.75 points each for a total credit of 2.50 points or $125 gross.

March Mini S&P options expire in 81 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/24/2009

traderfutures — Thu, 24 Dec 2009 14:36:14 +0000

The March Mini S&P Index is up 2.50 points at 1118.00 this morning as I write. The included chart shows that the stock market continues to trudge higher at a very slow pace. The directional movement indicators are bullish and the ADX line is now meandering sideways at a very low level suggesting no momentum behind this rally. That lack of confirmation from the ADX line tells me to stand aside for now. I recommend holding our current positions. The stock market index futures close at 12:15 PM today and will be closed for the Christmas holiday.

Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

March Mini S&P options expire in 85 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/23/2009

traderfutures — Wed, 23 Dec 2009 15:24:21 +0000

The March Mini S&P Index is unchanged at 1113.50 this morning as I write. The included chart shows that the March S&P Index traded to new recent highs yesterday but only could close near the recent highs from a week ago. Today, the S&P has, once again, attempt to trade to a new high for the move since last March but prices are having a hard time holding the gains. One may get the feeling that this stock market wants to go higher, but what concerns me and what also keeps me from adding a bullish trade is the structure of the ADX compared to the directional movement indicators. The directional movement indicators are bullish, but the ADX line continues to edge lower or sideways at a very low level. This ADX line tells me that there may not be a lot of strength behind this bull move at this time. I recommend holding current positions for now.

Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

March Mini S&P options expire in 86 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/22/2009

traderfutures — Tue, 22 Dec 2009 14:24:03 +0000

The March Mini S&P Index is up 3.75 points at 1112.00 this morning as I write. The included chart shows that the S&P is continuing to challenge the 1114.00 to 1115.00 area of the recent highs but with no follow through so far. The directional movement indicators are now back to the bull side but the thing that continues to concern me is the fact that the ADX line continues to fall lower. The ADX line falling to lower levels tells me that this current up move does not have a lot of momentum behind it. I would call this the reluctant rally. Otherwise I would be considering adding more bullish positions to our current positions. I recommend holding on to our ratio call and put spreads.

Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

March Mini S&P options expire in 87 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/21/2009

traderfutures — Mon, 21 Dec 2009 15:52:21 +0000

The March Mini S&P Index is up 13.50 points at 1111.25 this morning as I write. Is this a case of “here we go again?” The included chart shows that, once again, the S&P index is challenging the rally highs of the past two months in the 1114.00 to 1115.00 area. My expectation is that eventually prices will break out to the upside because every time prices have pulled back over the past two months, it has been holding at a progressively higher level. The directional movement indicators are beginning to cross, yet again, back to the bull side and the ADX lines is still dropping. As a matter of fact, this is the lowest level the ADX line has been in about a year suggesting that there really is no trend strength at all right now but a breakout of the trading range will probably get the ADX line moving upward again quickly. We currently own both ratio call and ratio put spread at this time, and I would like to continue to hold those positions at this time. If prices break out of the trading range and seem to be holding the breakout by the close, I may decide to add a position. Stay tuned.

Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

March Mini S&P options expire in 88 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/18/2009

traderfutures — Fri, 18 Dec 2009 16:48:39 +0000

The March Mini S&P Index is up .75 at 1095.00 this morning as I write. The included chart shows that the S&P has generally maintained up upward channel of trading over the past four months. Lately, prices have had a lot of trouble with the 1114.00 to 1115.00 area. As you can see from the chart, prices have formed a flat top in that area over the past month. Prices seem to be rolling over somewhat right now. Also, notice that all of the selloff’s from the 1115.00 highs, only fell to progressively higher lows each time. That shows that the stock market is showing a lot of resilience when a lot of other markets are currently in large corrections. We will hold current positions for now and watch for a breakout of the trading range.

Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

March Mini S&P options expire in 91 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.

MARCH MINI S&P INDEX–12/17/2009

traderfutures — Thu, 17 Dec 2009 14:57:30 +0000

The March Mini S&P Index is down 7.25 points this morning at 1098.50 as I write. The included chart shows that the S&P, once again, failed to pierce the 5 weeks highs up in the 1115.00 area, and is now falling back again. Because all of the recent lows have been higher, I still expect an upward breakout eventually. Now, if some of the recent price lows are broken, then we will have to watch for the S&P to hit sell stops and drop in price relatively quickly. I would prefer not to do anything new in the S&P until that break eventual occurs. The question is; Which way?

Followers of this letter should be long one March Mini S&P (1190 strike) call from 17.00 and short 2 March Mini S&P (1220) call options from 9.50.

March Mini S&P options expire in 92 days.

David Hall

This newsletter is not intended for dissemination to the public without prior approval from David Hall.