Market Ready To Rally Today – Gap Filled – Trump Has A Tailwind

Posted 9:00 AM ET - Yesterday the market probed for support and it closed on the low of the day. Support at SPY $237 held and the futures are flat before the open. The Fed is going to hike rates next week! This morning we learned that 298,000 new jobs were created in the private sector during the month of February. That is an incredibly strong number and it exactly what we need. Good news is good news. Analysts believe that there is an 80% chance that the Fed will raise rates next week (and that number is closer to 90% now). If that is the case, we need strong economic growth. This morning LinkedIn reported that hiring is at its highest level since 2015. ISM manufacturing and ISM services came in very strong last week. China's PMI was good and the trade balance numbers in China were in line this morning. The market can shoulder an interest rate hike if economic conditions are strong. I believe a rate hike is already priced in. If it were not, we would have seen a big drop in the S&P 500 when ADP was released. The new health-care proposal is meeting some resistance on the right. That means it could be palatable to many Democrats and it has a chance of getting passed. Republicans know that they need to get this through to have a chance at tax reform. Apart from the rate hike, I don't see any speed bumps. This dip will likely be a buying opportunity. The gap from last Wednesday has been filled and the breakout has been tested. I believe we will see another leg higher soon. Swing traders can nibble today if the market trades above the first hour high. If stocks continue to grind higher add to positions. A close above SPY $238 would be bullish. Day traders can get long early in the day. The fact that the market did not drop on the ADP report tells me that buyers are engaged. They will start to bid for stocks and I'm expecting a bullish day. Use SPY $237 as your guide. If we are below it, temper your long positions. If we are above it, trade from the long side. Trump's agenda is based on job growth and he has a tailwind. . .

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