12:15pm (EST)
All of the “President’s Men” couldn’t save the bulls today.
We knew it was going to be a rough open but the selloff that everyone has been anticipating has been limited to the support levels we have outlined all week for the major indexes.
The release of the monthly jobs report wasn’t really a surprise because we knew it was going to bad but the real surprise is how little our government has done to allow small businesses to grow. That, and the amazement that they didn’t cut more zombies off their payroll, led to a crummy jobs report.
Nonfarm payrolls rose by 54,000 versus expectations for 165,000, while private payrolls increased by 83,000 versus the expected gain of 173,000. The unemployment rate rose to 9.1% from the prior rate of 9.0%. The bulls did get a good ISM number which has helped their cause.
Of course, the Republicans are having a tea party on the news as many of them gathered together to tell the talking heads they are upset that there weren’t more jobs created. It was another dog-and-pony show for them to express concern while at the same time taking a jab at the Democrats. But we aren’t a political newsletter…
The good news if you are a bull is that support is holding and the market has come off its lows.
The Dow immediately started the session with a triple-digit loss and was down 144 points to a low of 12,104 at the open. The index has recovered over half the losses and is down 60 points to 12,187 as the bulls try to hold down Dow 12,000.
The S&P is getting hit for 8 points and is at 1,305 after kissing a low of 1,297.90 shortly after the opening bell. The 1,300 level will be a battleground going into the weekend and the bears desperately want a close below this level.
The Nasdaq is lower by a double-deuce (22 points) to 2,751. We have been mentioning the 2,750 level as a key area for Tech and it will also be an interesting tug-or-war during the final hour of trading.
We have been careful with our recent trades because we are nearly 100% certain the Dow will be at 13,000 at some point this year. On January 19, we said the Dow would trade 13,000 when the index was at 11,837. We had penciled in the end of April for the index to get there. The Dow kissed a high of 12,876 on May 1.
We lifted our targets for 2011 in February when the indexes were near our upper-end ranges and have gone on record as saying the Dow could trade 14,000 by the end of the year. For the S&P 500 we said the index could reach 1,450-1,500 in 2011. Tech? Well, we have said the Nasdaq could reach 3,000 but longer-term 3,400 by yearend.
However, we have also said there will be a pullback and we expected one in May (which we got) and into June. We aren’t sure, yet, if a pullback means a correction but we also remain optimistic that the current trading range will hold.
The main concerns for the market going forward over the next few weeks will be geopolitical concerns and the winding down of QE2. As we look into July, 2Q earnings will be the catalyst that moves the market higher or lower. For now, all we can do is look forward to next week.
The good news is that there could be a chance for some quick, easy money downside trades if the major support levels go down in flames.
We will be back Sunday night with our Weekly Wrap and will be profiling Clean Energy Fuels (CLNE, $14.44, up $0.08) and Sequans Communications (SQNS, $16.93, up $0.02) to see where they are at on the chart and their business models.
We will also try to do a video update for those of you who have ordered our trading manual, How to Trade Options on Momentum Stocks, that will cover WEEKLY options, LEAPs, and possibly, naked options as we open up the playbook for what could be a volatile few months.
We extended our offer to get the option trading course at NO CHARGE for those of you who order a 1-year membership to our Weekly Wrap. Folks, this is an incredible deal (an $895 value with free shipping to anywhere in the world) and the course really will have you up and running on options in a matter of weeks which includes the videos. If you are really serious about learning the markets, reading charts, finding trades, and doing the homework to be a successful trader then this is your calling.
We know a lot of people are nervous about learning options or the market because they don’t understand them but once you do, you will fall in love with the amazing things you can do with them. We make it easy for you to understand and we are extending the offer through the weekend. This course is one of the best and most affordable ways to get a real stock market education. Seriously.
We will be watching the close today and have updated our current trades one last time. If anything MAJOR happens, we may send out an alert, but we plan to stand pat until next week. The worst of the storm appears to have subsided and we will see where the bulls and bears are at Sunday night.
Have a great weekend everyone and make sure you hit us up on our offer!
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