Status Quo!

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Status Quo!

via T3Live Blog by Scott Redler on 4/2/10

By: Scott Redler

Today's job report landed smack in the middle: not too hot for all the analysts who say that the fed will raise rates sooner rather than later, but regardless this was the best report we've had in years. That should certainly keep the Bulls happy. We finally got some nice gains in the private sector and that makes the recovery look for sustainable. That being said, I think it's back to the same old market, except the emphasis on this next move forward into May will be even more stock and sector specific than it's been so far this year. Traders have been rewarded for following the rotation!

The move since the February 5th reversal day all started in the Russell 2000, followed by the Nasdaq. The S&P came next and lastly the Dow joined the party at new highs. This is how a Bull market rally should work: the growth companies and technology take the lead with value following the trend higher. Unfortunately this last leg up will probably be lead by the commodities and should lead to another 9% broader market correction (or more) as oil gets closer to the mid 90's. This will occur at around the point when the Dow gets above 11,000 and stalls in the 11,000-11,400 area.

Technically as long as the Dow holds 10,800 and the S&P holds 1,160-1,164, we should see this market make one more stretch through highs. These are key support in order for the current uptrend to remain in tact. After this last push, I will be on the lookout for a nice, tradeable correction that should start some time late in April or mid-May. As we go through earnings, we will see the "Haves" and the "Have Nots." But we will cross that bridge when we get there. Scenarios like Research in Motion (RIMM) will happan and disappointed investors will throw the company into the penalty box for another correction/consolidation period.

Right now we all need to stick with what's working: one to three day actionable strategies. Stay flexible! There are still plenty of problems facing America and there will be a time and place when the market will pay attention. But, wait for the action to tell us when the markets notice.

Have a great weekend!

 

 

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