Huge Job Growth and Wages At All-time High – Day Trade From the Long Side

BIG DAY - TAKE THE FREE TRIAL AND WATCH US MAKE MONEY Friday 9:30 AM ET - April Fools. You probably figured out the first part of the title was too good to be true. This has been a very quiet week for the market and the action should pick up today. The jobs report was perfect and China's PMI was above 50. The S&P 500 is down 12 points pre-open and once support is established I will be day trading from the long side. China's PMI was above 50 for the first time in a few months. The PBOC has been pumping liquidity into the banking system and that might be bearing fruit. Europe's PMI was in line with the flash number. The unemployment report showed that 215,000 new jobs were created in March. That is a perfect number (not too hot and not too cold). Janet Yellen gave a speech this week and her comments were dovish. That is consistent with the last FOMC statement and I am not expecting them to hike before the November elections (no matter how strong the economy is). Saudi Arabia said that it will not freeze oil production unless Iran does the same. Oil is down this morning and that is weighing on the market. Support at SPY $205 will be breached this morning. That was the breakout from Wednesday and I will use it as a guideline. Overnight market declines have presented some of the best day trading opportunities all year. Once this wave of selling runs its course, I will be looking for stocks with relative strength. In particular, I'll be looking for stocks that have recently broken through horizontal resistance on good volume and that have a buy signal from my trading system. When I have these elements, the probability of success is extremely high. The ideal set up today would be a swift decline that finds support in the first hour of trading. After a nice bounce, the market will establish a higher low and it take out the first hour high. A gradual grind higher and a close above $205 would be bullish. Earnings season is approaching and I am expecting a rotation into mega-cap tech stocks. Earnings season has traditionally attracted buyers and I believe the dip today will be brief. If by chance the market continues to drift lower and we make a new low after the first hour of trading, I will look for relative weakness. My favorite groups are cyclicals and basic materials. Trading volumes will pick up today and we should see some good price action. Be patient, wait for support and buy stocks with relative strength. . .

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