Stock Market Early Morning Insights – September 2, 2016

Today is jobs day with the numbers being released at 7:30 AM central time. The expectation is for 180,000 new jobs to be added, and the unemployment rate is expected to decline to 4.8%. Whatever the numbers, you can expect volatility in the futures markets when the numbers are released. Many futures traders, with the exception of the thrill seekers, avoid trading around these numbers.

Stock index futures are holding steady as I write this about one half hour before the announcement. Oil futures are up slightly this morning after having another miserable day yesterday for those on the bullish side.

The NASDAQ composite was up yesterday. The advancing issues versus the declining issues were slightly positive, but essentially were flat as traders avoided positions before the jobs numbers are released. The NASDAQ composite did test the lower boundary of the consolidation area, bounced off of it again, and closed at 93.27% of its daily range. This generated a VPA flag, test for supply. The force indexes both turned positive for the NASDAQ, and bears were frustrated once again.

After the jobs data is out of the way, we should get a feel for the mood of the broader markets. It should be relatively light volume day going into the long Labor Day weekend, and traders may be reluctant to add positions because of the three-day weekend. Next week, with the earnings season pretty much out of the way, I would expect to have a firmer grasp on direction of the broader markets.

The indexes continue to build a cause, and I believe that cause will ultimately resolve itself to the upside, but as you know, opinions don’t account for much of this market. That is why I always use stops on my positions.

Once again, the top 50 group inclusion report in the body of this report shows that the dominant groups yesterday were mostly tech groups. The Semiconductor Devices continue to be one of the leading groups along with Application Software, Internet Media and Infrastructure Software. The weakness was in Energy related groups, Utilities, and Specialty Apparel Stores. With tech stocks continuing to lead, I do not see this market breaking down until they do. Every pullback seems to be absorbed with buying volume.

I am just winding down my first webinar series since Ian passed away. This is a link to the trades that I took with a small account, and the current returns.

https://1drv.ms/u/s!AshhTFqIPakDgsI3tm_MfUR9YiGF9A

I was stopped out of several trades, but I let the winners run by moving stops up when certain reward levels were attained. This method of trading is based upon risk control and buying strong stocks in strong groups. I managed to attain slightly over and 80% return on risk since mid-July. This is return on risk, not return on equity. I will begin another webinar series in late October if you are interested. This is the link to my trades, and to the results through yesterday. Several positions are still open, and my return on risk numbers could change substantially until these positions are closed. They will be closed with a trailing stop at a reward level unless I decide to take them off when the webinar series ends tomorrow.

STOCK MARKET EARLY MORNING INSIGHTS

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