Look at the last four days in the market. Aside from the spike higher on Monday morning stocks have gone nowhere. Investors are waiting for the results from the July jobs report. It will take a better than expected jobs report to keep this rally alive and even that won't guarantee we won't see some sell-the-news reaction. On the other hand a disappointing report could easily spark some major profit taking after a +7% rally in July. Since the report comes out Friday morning before the opening bell I am not adding any new plays tonight. Odds are extremely high the market (and most stocks) will gap open one way or the other on Friday.
Next time we find the market in this situation, with stocks in a narrow range ahead of a major economic report (almost guaranteed to move the market) and option expiration is only two weeks away - I would consider market neutral strategies like a straddle or a strangle to capture any volatility following the report. They don't always work but sometimes we can catch a significant move. Unfortunately, it's too late for us to launch those positions tonight.
Just because we're not adding new positions tonight doesn't mean we can't prepare for tomorrow. I'm listing several stocks on my watch list. These might be potential trades soon.
INFY: still has a positive long-term bullish trend. A breakout past $64.50-65.00 would be bullish.
ILMN: this stock is breaking out from a six-week consolidation and looks ready to rally. Unfortunately there is long-term resistance in the $47.50-48.00 region. If ILMN fails under $48 look for a dip and bounce back near $45.00. Otherwise look for a breakout.
GS: The stock is up more than $25 from its July lows. Shares are clearly short-term overbought. I would wait for a pull back into the $150-145 region before considering new bullish positions. Look for resistance near $160 and its 200-dma.
IBM: This technology bellwether stock is inching closer and closer toward major resistance in the $132-134 zone. A breakout over $134 could herald the beginning of a major leg higher.
TGT: Traders responded well toward TGT's same-store sales data today. The stock looks poised to rally but there is resistance near $53.00 and its 100-dma (near $53.50).
MTD: This medical device/supply company looks ready to run toward its highs near $130. It might be a buy on a positive jobs report. Otherwise wait for another dip near $115 and its 50-dma.
RMD: This is another medical-related stock that appears to be breaking out from a multi-week consolidation. There is resistance near $70. A stock to watch.
NEU: This stock broke out over resistance several days ago and has been consolidating sideways since. If the market rallies this stock could see a run toward its 2010 highs near $125.
MICC: Shares are sitting near one-year highs. I would prefer to buy a dip or another bounce near $90.00.
OXY: This oil-related stock has been underperforming. A breakdown under $74 could herald a very significant correction lower. Potential put play.