Trading Notes for Today – May 3rd

The market figured out the Fed, ECB, Japan, China, etc. are dumping large amounts of money into the system and it is party time. The amazing part is that the growth in the world continues to limp along. All this money and no place to go… that sounds like deflation! All that brainpower working on this and no creativity on jumping starting growth. Enough of that… today is all about jobs or lack of them being created.

135,000 jobs for April is the target. Hit it, life is good. Miss it, life is good. Say what? Yes, this is a market that is prepared to ignore this number and move ahead. If it is absolutely awful there will be some selling followed by buying. After all bad is good. If the economy is bad it will get more money from the Fed and world central banks to play with. If it is good and growing the stimulus will be withdrawn and that creates a negative tone for inflation, growth and interest rates.

Prepare for the best and hope for the worst is the new motto of investing.

Sector Moves of Note:

  1. S&P 500 index pushed back to the previous high of 1598 and we are still looking for the catalyst higher. Jobs report tomorrow? Are the jobless claims a setup for the move? We will watch and see. If it is the upside catalyst we will add to SPY @ $160.
  2. Gold opened higher after being down 2% on Wednesday. There is no clear indication on direction based on Thursday’s activity. I am still favoring the downside as this bounce plays out. 1475 resistance and 1430 trade target on the downside. If we move through the $143.50 level the  upside play will be the call.
  3. Oil progressed and jumped more than 3.6% Thursday and returned to resistance near the $94 level. Is it speculation or growth? Two day and completely opposite opinions driving prices equals speculation in my view. Watch and play according to your risk tolerance. DTO or OIL. Depends on the mood following the jobs report today.
  4. NASDAQ 100 held up better on Wednesday and followed up with a solid move higher Thursday. Large cap stocks are in control of the move higher. If you didn’t add to the position yesterday look for an entry point today. Test back to $70.50-70.75 would be a good spot to add.
  5. Semiconductors made move above resistance to new high. Look to hold the move above $60.30 on SOXX. A test and hold would give a good entry point to add the position if you don’t own the sector.
  6. Pattern Set Ups to watch Friday: 1)  GOOG – test of the break above $812 ($821 was entry) Watch today for test and move.  2) EXAR – Semi broke from trading range (test and move higher) 3)  NFLX – Continuation from the consolidation on the break higher.  4)  KORS – Double bottom breakout  5)  AMZN – Broke from trading range lower, back to bottom of range, look for move back into the range and run to the high $276.

It’s Friday, It jobs report Friday, be patient with the open and take what the market gives. Don’t chase anything, there will always be an opportunity in the market. Be patient and disciplined.