..Nicely done..

As SP futures traded down 10pts to 883 in premarket, most Bulls probably wished the weekend hadn’t ended as the market was swamped with negative headlines noise.  It doesn’t help when your VP comes out and flatly says the administration ’misread’ the employment picture while their country celebrates. Considering many were probably absent for Thursday shellacking, the morning was their time to cash in their profits as growth worries extended from the NFP report through the weekend headlines.

It turned out to be almost the perfect setup to test the 888-880 level,  notably the 200MA again for support.  We commented yesterday the world economies, including U.S should not be held hostage by one job report.  There are other things that should be in focus such as the PMI’s, upcoming earnings until the next job report.  Basically, we think the market can slide this underneath the carpet for awhile and deal with other eco’data points/ earnings. 

In a very timely manner, a better than expected ISM release coincided with the market at 200ma. Slowly, the market made an impressive reversal taking baby steps all the way into the close.  The ISM is now at it's highest point since last September with many of the sub groups following suit, including employment rising to just below 50. A day the SP opens at 894 and goes to 886 before closing above open at 898 should bring a positive tone to the marketplace the next trading day.  Intraday (2pm), NASD was only 5pts off days lows and we noted there was no reason for the lagging downside action.  We were waiting for a turn off 50ma and we got 12 points added on after our note.  If the market rebounds more tomorrow, we think this might be the group to lead and so we were looking at our shadow listed techs to play first, eg STAR STEC RVBD etc.   Just go on site to access shadowlist and in sector box click to 'Technology' and you'll get 10 or more names, we'd look to trade.

We red flagged the action in commodity linked stocks last week due to lacklustre action heading into and after China PMI and today they got hammered with many down 7-10% in the first hour.  As we said yesterday, we’re avoiding this group in the interim, but today's sizable beatings should provide some intraday trades this week.  We also have no love for banks- brokers probably till we get to some earnings action next week, so we’re down to only Techs possibly keeping the market away from 200ma this week.

Judging by todays reversal at support for SPX/NASD,  we highlight the fact we have little in the way of economic data points this week.  Bears should have little ammunition to press this market below 200ma with no eco' additives to the NFP#’s to use.   Of course, we can get some macro political or some bad earnings pre-announcements, but you can’t trade off your heels.   Simply, we think today turned into a buying opportunity near the support we just discussed in Journal and why we alerted intraday.