Market Will Struggle To Breakout On the First Try

Posted 10:00 AM ET - The market is floating higher and it wants to challenge the all-time high. Mega-cap tech stocks have been leading the charge and Facebook posts after the close. It will be difficult for the market to breakout on the first attempt. ADP said that 183,000 new jobs were created in the private sector to during the month of October. That is a solid number and it is in line with expectations. I believe Friday's jobs report will come in at 190,000 and September's number will be revised upward. Employment is stable, but not robust enough to justify lift-off in December. We are heading into the holiday shopping season and the Fed does not want to spoil the mood with a rate hike. Global economic conditions are stable, but sluggish. This won't change the rest of the year and it won't help or hinder the market. The excitement will wane as we head into the back half of earnings season. Profits are down year-over-year for Q3 and stocks are trading at a forward P/E of 17. There is room for profit-taking and a potential rate hike will keep a lid on this rally. I am flat as a pancake and I am day trading. I believe I can catch the rest of the rally without taking any overnight risk. "The dogs are barking." This phrase is used when weak stocks joined the rally. It is typical to see this at the tail end of the move and the laggards are bouncing. I would not be surprised to see profit-taking in the next few days. If the Unemployment Report comes in above 200K, December liftoff worries will spark selling. If the number comes in below 150K, economic concerns and fear of a premature rate hike will haunt the market. Either way, I don't see a scenario where the jobs report will spark a rally. Good news is priced in and any surprise favors the downside. Keep your size small and evaluate the price action as we challenge the all-time high. The early gains this morning have vaporized and we saw selling late in the day Tuesday. The downside will be tested this morning and we will be able to gauge the bid. . .

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