The SPX is caught in a tight trading range again after breaking out above the resistance at 1151. We saw the market meekly test both support at 1151 and resistance at 1164 yesterday and we expect more of the same on Thursday. Friday should provide some fireworks as we’ll get the unemployment report. Following the poor ADP number, much of Friday’s number may already be baked into this market.
The euro has been on a tremendous run versus the dollar and that is something worth keeping an eye on. We think that ultimately we will break above this 1164 level and then we’ll target 1195-1200 next. Along the way we’ll see pullbacks and 1-2 day correction but we expect a rally to close out the year. Signs of a dreaded double-dip have faded away.
We remain bullish.
Weekly Economic Calendar:
• The Labor Department will release the weekly new jobless claims figures, while the Federal Reserve will report on consumer credit use in August. Joining Alcoa Inc. (AA) in the earnings spotlight will be International Speedway Corp. (ISCA), PepsiCo, Inc. (PEP) and Micron Technology, Inc. (MU).
• The nonfarm payrolls report and unemployment rate for September will arrive on Friday. As always, these numbers will be closely watched. The Commerce Department will also report on August wholesale inventories. There are no earnings reports scheduled.
New Trade Idea:
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