Mixed Drop and Pop

The Jobs Report came in worse than expected and dropped the market right out of the gate. However, Commodities and Energy stocks gapped up and ran hard this morning, so I sold all or parts of POT, MON, RIG, CNX, and ACI - all for big, big profits, especially for trades I started just before the close yesterday and mostly finished off this morning. I am holding a little of the Coal still (CNX and ACI), because it may have some more room.

The market is rebounding a bit from the poor Employment Report because the Commodities and Energy stocks are getting sharp buying. We have a potential Double Top on the 60m charts (on the Dow and other indexes) with a negative divergence. But unless it breaks the neckline at the 12,530-50 area I'm not playing puts. If the DIA goes north of 127, and the SPY goes north of 138, I may play calls instead - because the market will be shaking off a poor Jobs Report and focusing on the "brighter" future. I may even look at getting back in to some Commodities and Energy stocks or some Financials or Tech on a quick play as well.

The markets continue to stay range-bound. Three Narrow Bars (Doji's) in a row on the Dow. The Naz tried to make a little noise, and I was tempted to go with some Q's calls, but the DIA and the SPY didn't follow, so I was immediately suspicious. As it is, I'm sitting on my hands, and probably will do that for the weekend. I sold a little more Coal right down to the last 20% of all my call positions. Some really nice profits. We have some crosscurrents out there with attenuating Employment but ramping Commodities and Energy. Probably what's happening is that Energy and Commodities are ramping on a falling Dollar and not rising demand. The fact that Commodity stocks like MOS have had positive earnings is adding to the speculative move in those sectors. So the market is caught in an indecisive crosswind and is playing it tight ahead of the weekend. I won't be surprised if the markets finish the day right in these areas.

I decided to nibble just a little on STLD since it is breaking out and has a nice pullback going just before the close. I picked some calls off at 35.75, and the best case is that it rallies back a little at the close. I don't like the lack of momentum in the overall market, but I don't mind nibbling on Commodity and Energy stocks. I am looking at MOS and CF as breakouts as well, but I think I may wait for Monday on those, or just nibble a tiny bit. The swings in Commodities and Energy look very mature, so I'm probably only going to play the STLD, (and MOS, CF if I get them) for 1-2 days max.

We did close with our third Doji in a row. MON was a Doji today, so selling into today's pop, right near the high, was exactly right for me, a nice 14% gain in less than a day. RIG was a Shooting Star type candle today, so ditto on RIG, selling right near the high for a 33% gain. POT was a small body candle, which gapped into Star position, so once again - sold almost exactly at the high for a 33% gain. ACI and CNX were strong moves and I sold most of those but kept a little. I am averaging about a 38% return on ACI and a 33% return on CNX. I nibbled on STLD calls, but I held off on MOS and CF. I am curious about Gold, it looks like it could roll over again soon, and AET is barely clinging to support. JCP is acting like it's topping out a bit, but we will see. I still think that when we break the 3 Narrow Bar range on the markets that it will go in the direction of the break hard for a day or two. I don't know if it will be up or down, so I will watch and be ready.

The major indexes are sitting right at the low end of resistance zones. We should find out soon, perhaps Monday or Tuesday, whether or not the market can break out, or whether it will roll back down short term. I will review and post an updated watchlist tomorrow.