Editor's Note:

The market didn't make much progress today in spite of the ISM services data and the ADP employment report. I strongly suspect that stocks will drift sideways until Friday's non-farm payroll report. More importantly I'm concerned that stocks could see a sell-off on the jobs data since expectations are growing for positive job growth. Thus the market could get disappointed or just "sell the news".

I am not adding any new trades tonight. While the trend is up I would try looking for some potential short candidates just in case the market does roll over. A few sectors that caught my eye tonight were:

The homebuilders look bullish. Oil service stocks are strong but look a little bit overbought. The rally in financials is very encouraging for the overall market but they too look a tiny bit overbought. You could wait for a dip in the oil service or banking stocks. I would also cast a wary eye on the transports. I'm concerned that the bounce in the transports might roll over.