A disappointing ADP jobs report stung the market this morning as private payrolls continue to limp along. Futures were indicating a lower open after the Nikkei dropped more than 2% overnight. Once again we saw buyers jump back into the market pushing the market well off its morning’s lows. Perhaps traders are fearful over a pop over a deal like we saw earlier this year, but whatever it is we continue to see buyers step up. The S&P 500 was the leading index today with the NASDAQ not far behind the large cap index. Small caps lagged today, but after outperforming and at highs today’s sluggishness isn’t alarming. Overall a good day for the markets and we continue to see positives outweighing negatives.
At the moment a key level for the market to hold is Monday’s low where we saw quite a bit of support rush into the market. Unfortunately for the Dow Jones Industrial Average it is not the case, but for the others it is. If for some reason we see the indexes take out Monday’s lows with vigor we’ll certainly have to adjust. We cannot predict the future and we’ll only go with how the market reacts. When price triggers are hit we simply go with our rules as they are proven. For now, the Dow is the only index that is not acting well and until others flip we’ll stick with this trend.
One market leader took a hit today and it was TSLA. Certainly the above average volume selling is something to take note of, but it doesn’t necessarily mean we have a top. We’ll certainly see the TSLA bears come out of their caves and they may make a great case, but many of them have been wrong for quite some time. There is nothing like a short position that rises 6 times in a year. For TSLA today’s low will be an important for shorter term traders and look to see selling accelerate if today’s low is breached over the next few days.
The VIX jumped back above the 16 level today, but remains below August high of 17.81. It wouldn’t surprise us if the VIX jumps above August high we may be in for some volatility ahead of the debt ceiling deadline. Volatility is a tough game to play and you have to have a strict discipline to even play around. It is probably best to watch the action from the sidelines if you don’t have a sound plan of attack.
An interesting development in the precious metals occurred today with Gold and Silver nearly reversing all of yesterday losses. GLD and SLV have been out of favor for quite some time and it will be interesting if the recent action will change the sentiment. Time and price will tell.
Ride your winners.
