Jobs Report and Watch List 7/2

Jobs and Holidays.

Evening, Bulls. Hope you had a nice trading day. I didn’t really participate thanks to a nagging head cold. Blahh.

Let’s jump right into the SPX –

Looks like it was an overall good trader’s day thanks to afternoon strength in the Euro that balanced the major sell-offs in commodities, like gold. From a technical standpoint, the daily might actually be showing a bottom – at least for now.. and when I mean now, I mean tomorrow.

Check out the long lower shadow (pipe) on the SPX daily. This can sometimes be an indicator of a reversal. Two pipes a day or two apart is an even stronger indicator of an impending reversal. Don’t get me wrong; one day doesn’t convince me – just something to consider tomorrow morning. Notice the long lower shadows lately and how they marked bottoms. Will we see the same tomorrow?

Well, as you’ve heard, all eyes are on the Jobs Report tomorrow before the market opens: http://www.bloomberg.com/markets/economic-calendar/

My guess is that they’ll generally suck and the market will gap down a little. HOWEVER, everyone is expecting that to happen and the sell-off over the last few days is, in part, do to traders not interested in holding swings into this extremely important report. So, if the market already has it baked in to an extent, then, in my opinion, it will take a really horrible report to cascade the market down much further tomorrow. A neutral to kinda ugly report will likely gap down the market a little at the open, but I believe we’ll see buyers interested in an intraday scalp and those looking for bargains.

Bad news is better than no news. Take a look at the oil disaster and the European dept crisis. No end in site. My hope is that the market will finally feel relieved just to get the news behind them and the calm will create buying.

Based on that premise, here is how I’m trading the morning open.

At the open I’ll sit on my hands for the first 30 minutes, or so. I want to see where the market is taking us. Then, I’ll spend time watching for consolidation or pattern reversals on the SPX intraday. I’m still not comfortable looking for swings – especially into a holiday weekend, so I’ll stick to in-and-out scalps. TZA is my bear play (good for scalping because it is highly liquid) and here are a few stocks I’ll watch on the long side for possible scalps. A lot of these are good swing setups that I’ll likely not add tomorrow, but, instead, keep ready for Tuesday:

ARMH – I would like to play this for a swing, but maybe next week. For now, keep this one in your pocket or watch for scalp out of bull flag.. has been a strong stock over time.

ARO – Good company, popular with the kids, nice chart over time. Right now it is forming a messy cup and handle and managed to break out of it today. This is more of a swing setup and might, like ARMH, be good to put in your pocket until next week.

CIM – Scalp stock only. I’m not about to swing this crazy looking daily chart. However, I am interested in a possible scalp off of today’s horizontal support bounce. Will be on my watch list in the morning.

FFIV – Nice upward channel with bounce today off bottom. This is not a bad looking swing chart with stop just below trendline. If you are brave enough to swing before next week, make sure there isn’t any pending news or upcoming announcements. Also, as with all of these stocks, make sure the setup is still valid before you consider trading. They could open up at a completely different level tomorrow.

RYN – Looking back on the last 6 months daily chart, RYN has a tendency to use SMA200 as support. Possible swing if market turns north with stop under SMA200

THS – SMA100 support on long term upward move. Swingable as long as SMA100 holds. I’ll be watching this next week.

JMBA – Horizontal support and SMA200 support. Would love to see some consolidation leading into the weekend. If the market is green next week (not holding my breath), then this could be a great swing.