Market Will Tread Water This Week – Possible Speed Bump On Tuesday

Posted 12:00 PM ET - Yesterday, the market probed for support and it tested the 100-day moving average. That level held and we are bouncing today. Trading volumes are very light and the doldrums are right around the corner. ADP missed expectations and the market liked the news. We need job growth and I don't think we are going to see it. A Fed official said that nothing is concrete regarding a September rate hike this morning and the S&P 500 jumped higher before the open. The Fed is not going to show its hand when they are leaving for recess. I would not expect a Fed official to say anything else. If they do NOT raise rates in September, they will probably wait until the spring of 2016. They don't typically hike during the holiday season. I don't think they want to wait 6 months so they will raise a quarter-point in September. A “one and done” message could be bullish for the market this fall. The market is simply chopping back forth on light volume. Don't read too much into any of these moves. I've been mentioning that the price action would have a bullish bias this week and that the market should be able to tread water. The jobs report should be in line and even if it is not, any miss will be blamed on seasonal adjustments. China will post industrial production, retail sales and foreign investment next Tuesday. That has the potential to miss and it could weigh on the market. The closer we get to September, the heavier the selling pressure. Profit-taking will keep a lid on a market and any bad news could spark a nasty little decline. I am day trading this week. I don't want to have any overnight risk exposure in this choppy market. If China's numbers are in line next week, we could easily slip into the summer doldrums. Traders take time off in August and I can already feel the volume slipping away. Look for short-term trades where the stock is breaking out through resistance after posting excellent earnings. These moves typically last a few days and you can hold the stock overnight. Keep your size small. . .

Daily Bulletin Continues...