Jobs' Report May Provide Opportunity

Market Action:
The stock market got off to a rip roaring start again on Thursday with the Dow jumping a cool 100 points in the first hour.  That was pretty much it for the Dow as it traded in a range until early afternoon.  That must have been nap time as the Dow decided to go down about 75 points right after lunch making it look like the sell off was underway once more.  But, with a little more than an hour to go the major averages stabilized and then went out with respectable gains for the day but near the low end of the trading range for the day.

Probably the biggest news of the day came out of Europe where the ECB, European Central Bank, raised its key interest rate by 25 bps to 3.75%.  Ok, maybe it wasn’t that big of news because it was widely expected so it didn’t have much impact on the markets.  

Opinion/Analysis:
Since it’s Thursday evening and our last post of the week, we wanted to talk specifically about the news item for Friday, that being the jobs’ report due out just before the market opens.  For most of you, the news will most likely be out by the time you read this so you will actually know what happened after the market opens but for us, we don’t know and we are trying to second guess the market.

There is some attention being paid to the jobs’ report this month since the number is expected to be a relatively low 90K to 100K of new jobs in February.  We speculate on the results of higher, lower and the Goldilocks “just right” result.  We almost believe that no matter what happens the market will open up in the morning.  Then there could be the start of a down move.  

We have been watching this market try to crawl out of its oversold condition the last few days and we think the market is trying very hard to come out but so far prices have not been able to get back up to our targets.  You may recall we have been calling for the Dow to move back to the 12,500 range.  After looking at the chart a little closer, there is some recent resistance in the 12,325 range which did contain Thursday’s advance.  The minimum retracement we would expect is near the 12,340 level and maybe that level will be reached in Friday morning’s session.

Our Moves:
On Friday morning, we will be interested to trade if we do actually get a strong opening.  In that case we would like to take advantage of the situation expecting that the latest rally is about all the market can muster.  Our trades will mostly be puts and we will limit them to the tech (INTC, AMAT) and financial (MER, JPM) areas with a possible look at the QQQQ puts for a market position.  We haven’t made up our minds this evening as to what actually to do but we will let you know on Sunday evening.  

Have a great weekend and here’s hoping you are in cash.

Dow Industrials:  12,260.70  +68.25
VIX: 14.29
HUI:  329.39
QQQQ:  42.97
RYVNX:   17.58
RYAIX:  21.89
RYCWX:  36.91
TLT:  90.35
BEGBX:  13.82