Cheers to Unemployment Friday

Friday we get the all important Jobs report which can lead to some volatility in the market. This time the Wednesday Update is looking for a defined market top to form. This usually resembles a nice upside pop in celebration of the number, whatever it may be. The market seems to be whistling to its own tune the last few weeks and probably will come up with a reason to jump up with any number that comes out of the jobs report. If it's too big, the economy is getting stronger, if it's too small, the Fed won't need to raise rates and of course if it's just right, Goldilocks will appear. There are many out there who think Goldilocks is already here.

This morning the weekly jobless claims number showed a bit more weakness than was expected, with claims up 25K compared to an expected increase of just 2K. The jobs number is expected to show about 180K growth compared to last month's 274K. That number will most likely be revised and the market tends to look at the revisions to see a trend. And, as we always say, it doesn't really matter what the number is, what matters is the early reaction to it.

Ideally, we will see a good up move in the morning confirming half of our conjecture. Then it will be up to the players to see if that will be the peak for the move and the summer. You can never be sure, but the moment looks like it has arrived to us. Oil has moved up (not today), gold reversed course this week, the market is well overbought and WE are SHORT. Ok, maybe that last one is a little selfish but it's true.

I have been long PAAS however and that has done very well but today PAAS popped a little at the open and gave me cause to sell my position. I am looking for an entry point again. I have traded it twice in the past two weeks, bought it once at 12.60 and took 13.10 for it and then bought it again at 12.60 and sold it today right after the opening bell at 15.25 for a nice 20% move. Can you get it to go back down to 12.60 so I can do it again? Please?

Seriously, I don't think PAAS will get back to 12.60 so now I need to decide when to get back in. It seems too soon to think that if the market pops tomorrow that this stock would drop enough to let me back in. But, such is the nature of bull runs, they tend not to let you back in. The way I will try to trade this is to buy early weakness and that may be tomorrow. Based on normal corrective retracements, the stock could drop back to around 14 but that could be wishful thinking.

At the same time, gold looks like it might have reversed its course this week. Today it gave us a strong up move, about six dollars even with a strong dollar and a weak Euro after yesterday's Dutch no vote. So, all of a sudden the precious metals are beginning to pick up some bids. Friday we get the commitment of traders report which should be revealing.

So, two ways to travel, short the market on an strong opening or buy the metals or mining stocks on a little weakness. You do have some extra cash lying around after selling all of your stocks into this rally over the past week or so, right???

I apologize for the length of this tonight but Friday is an important day.

Dow Industrials: 10553.49 +3.62 (enjoy that 10,500 while it lasts)
BGEIX: 10.43 (managed a one cent gain)