Good evening. The market remains at elevated levels and has kept us guessing once again as we head into tomorrow's employment report. The safest thing to do here is be patient and see how the market reacts to the numbers. As such, I am not releasing new plays tonight but have provided a long breakout plat below for those interested.
Personally, I think a bad employment report may be just what the market wants to hear because it will just about guarantee more quantitative easing from the Fed. On the other hand, a good number could cause a sell the news event on the prospect that the Fed won't take as much action. Watch the dollar and its inverse correlation with the broader market for clues on direction. It should lead tomorrow.
Regardless of tomorrow's outcome, or lack thereof, it seems apparent that dips will get bought. If there is a sell-off I would use the opportunity to tighten stops or take profits on bearish positions. And if we breakout higher I would be keeping a tight leash on bearish and bullish positions. Either way I believe we could see some volatile trading as the tug of war continues. The overhead resistance remains and I doubt it will be broken without a meaningful correction first. Staying nimble here and hitting singles is the name of the game.
Schnitzer Steel (SCHN): There is big ascending triangle that has been building since July. Look for a breakout above $50.00 and target a +$3 to +$5 move higher.