Monday Morning Trade Ideas

• stevenplace
• May 18th, 2009

Premarket futures up but I’m waiting to see if the opening structure provides us with more evidence of a trend change or just a correction from being so overbought. I went through all the charts of the Nasdaq 100 last night and saw a good percentage of them with recently broken trends, so that gives me pause about the overall technical health of the market. I’ll be keeping an eye out on market breadth indicators as well as particular price levels throughout the day to see if we can derive any trades from them.

Once again, the overall theme I have for this market is long commodities, short consumer. This has been my overall thesis for the past several weeks and it has done wonderfully. The restaurant sector continues to look good to the short side, and I’m loving the ags (POT AGU MOS CF) for a long trade.

Here’s some other charts I’m watching out for:

23.5 is a critical level for AXP. If it breaks that, I’ll buy some puts to get delta negative and vega positive.  Worst case stop around 25. I’ll take 1/3 puts off at R to take some exposure off… although the delta should be about the same from the start of the trade (hooray gamma!) and I’ll trail the rest on the latest lower high.

I’m looking to sell front month 30 puts at .85 with a stop below 31. It’s about a 4R trade and has a very clean entry/exit position. If it drops below 30 I’ll either stop out or roll into a bearish vertical, buying ITM puts to get delta negative. We’ll see.

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Tickers: axp, mvl

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