12:30pm (EST)

We knew the economic news was going to be lousy over the next few days although we are holding out hope for a surprise in nonfarm payrolls and the unemployment rate on Friday.  Today’s news on the labor market didn’t paint a pretty picture for Friday as the ADP Employment Change report indicated that only 38,000 private payroll jobs were added versus expectations for an increase of 177,000.    

The ISM Manufacturing Index for May came in at 53.5 versus expectations for a print of 57.6.  This was down from the 60.4 in April but still shows expansion.  Anything below 50 means manufacturing is showing contraction.  Elsewhere, Construction Spending was up was 0.4% which was a sweet surprise as most of the suit-and-ties had penciled in a drop of 0.5%.

This has led to a pretty disappointing day for the bulls but we kind of figured the bears would test prior resistance which is now support if it holds.

The Dow is down 190 points to 12,379 while the S&P 500 is lower by 20 points to 1,325.  The Nasdaq is off by 38 points to 2,797.

As far as specific stocks, Research In Motion (RIMM, $40.50, down $2.35) is at fresh 52-weeks lows after an analyst questioned the company’s upcoming quarter.  One sharp kid figures Nokia’s (NOK, $6.52, down $0.49) profit warning could spell trouble for RIMM’s margins as lower selling prices weigh on profits.  We aren’t sure if they are taking clues from us but today we are singing.  We have sounded like a broken record for 3 weeks and it is good to see the outside world waking up to RIMM’s problems.

Here is what we said in our Members Area this morning:

“RIMM touched a low of $42.55 yesterday and the 52-week low is $42.53.  We are so close to a breakdown that we can feel it coming.  Our near-term price target is $38 for the stock which gets these options to at least $2.”  (END)

More good news came our way after Polycom (PLCM, $58.10, up $0.70) announced a 2-for-1 stock split.  If you are a stockholder at the close of business on June 15, you will get one additional share for every one share you own.  Of course, the stock price will be cut in half but this is a bullish and we talk about how to play these events in our option trading manual, How to Trade Options on Momentum Stocks.

Some of you may have missed our special on getting this course (at no charge and includes monthly videos) by subscribing to a 1-year membership to our Daily or Weekly newsletter.  We have had quite a few emails come in today asking us to extend the offer for a day so here you go.

Folks, we want you around for a year because we really want you to learn how the market works, what to look for, how to identify a good trade, read a chart, understand economic reports, and to know what companies are reporting earnings on what days.

You might as well learn this stuff now because when you retire, what else are you going to do, let someone else manage your money?

On that note, we have 2 NEW TRADES for you today and we have updated our current ones.  Subscribers, check the Members Area for the updates.