We're waiting on the Non-Farm Payroll Report.
Yesterday, we got the happy talk we expected from Minneapolis Fed Governor Kaplan and, he did such a good job goosing the markets at 11:30 yesterday, that he's speaking again today at 10:45. Of course he'll say the same thing but will the markets react the same way? That depends on the jobs report and how FAKE this low-volume rally we've been having really is.
As you can see from Dave Fry's SPY chart, volume yesterday was a pathetic 94.8M and the spikes of volume on the way down were most of the up day's trading. On the whole, we opened the year on Jan 4th at 200.49 and dropped to a low of 181.09 (down 9.6%) intraday on Feb 11th and now, March 4th, we're back to 199.78 which is just over a 10% gain from the low (199.19).
According to our 5% Rule™, after a 10% run we expect a 2% pullback as we retest the highs and a bit of consolidation. Today's NFP report will either pop us over that top or, more likely, give us that 2% drop test we've been looking for. We shorted the Russell yesterday at 1,065 and after a very small drop, that trade failed but then, in our Live Member Chat Room, we shorted it again at 1,070 an hour later (10:44) and the 2nd time was a charm as it dropped back to 1,066 and we took a $350 profit off the table at 1,066.50 an hour later.
This morning, ahead of the NFP report, it's a bit too dangerous to bet the Futures so we're just watiing to see what happens for now. We headed downhill after last month's NFP report but, as I mentioned the following Thursday (2/11), a lot of that has to do with scaring people into buying bonds each month – so people won't notice that no one actually wants to buy notes that pay 2% interest, let alone 0%!
Nonetheless, in our Live Trading Webinar that week, we called a long on Nikkei (/NKD) futures at 15,700 and this morning they hit 17,050 for a gain of 1,350…