Jobs Report “Can’t Lose” – Market Should Grind Higher Into the Number – Use Caution

Posted 9:30 AM ET - Yesterday, the market broke out to a new closing high. Stocks will try to push higher ahead of the jobs report tomorrow. Analysts are expecting 200,000 new jobs in the month of March. If the number comes in light, bad weather will be blamed. If the number exceeds estimates, traders will assume the recovery is underway. This "can't lose" scenario could create a slightly overbought condition. Last month the market declined after the jobs report. Be mindful that ISM services will be release in 30 minutes. The upward momentum is strong and bulls are buying ahead of earnings season. Asset Managers wanting to reduce risk have raised their offers. They will let this market run so that they can exit at a higher level. Banks dominate the first two weeks of the earning cycle and the results should be good. Interest rates will creep higher this year and the Fed will maintain its zero rate interest policy. That means the spread between borrowing and lending rates will widen. This is good for banks and the financial sector should lead this move. Growth in Europe is intact and the slowdown in China is not spooking investors (for now). There are plenty of issues, but they won't come to roost for at least a few weeks. Trade the breakout, but be cautious. Use SPY $188 as your stop. Focus on stocks that are breaking through horizontal resistance. Use that level as your stop. Set targets and move your safety net higher as the stocks rally. I believe we are in the final stages of this rally and trouble lies ahead. Resistance will build towards the end of the month. The price action this morning looks good and the market should grind higher today. . .

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