Market Slips on Nonfarm Payrolls Report
This morning's unemployment figures were a little disappointing for Wall Street as most of the slick-talking pros had penciled in a rise to over 200,000 in the Nonfarm Payrolls report. The "average" expectations were for an increase to 185,000 so the 162,000 print wasn't too far off when looked at under the microscope. The Unemployment Rate dropped to 7.4% but we keep reminding you this number is trending lower due to the number of people dropping out of the labor force.
We were quite happy with the report because a print north of 200K would have tapped more tapper talk and we could have gotten a bigger pullback, or perhaps a rally that may have faded. With the moderate losses at the open, fresh support that served as prior resistance is holding and the bulls are trying to bounce off the lows. We have seen weak opens on recent Fridays with a strong midday reversal so maybe we get a slightly higher close and would be the perfect setup for next week.
We have been on a nice streak since late May as we have closed out 9-straight winners for the Daily from our July trades and we are 21-out-of-27 (21-6) for nearly an 80% win rate since late May. If you add the 10 trades we closed for the Weekly Wrap since May, we are 30-7, as that newsletter is 9-1 over the same time period. These trades were mostly call options or stock trades as we urged our subscribers to stay long into May through July as the suit-and-ties sold in May and went away. That theory didn't play out this year and we made our year trading the action.
Now that we have entered into August and have broken out of a tight trading range that lasted for a few weeks, we expect the action to continue to be choppy but with more volatility. This could lead to another leg higher for the indexes for another couple of weeks or a pullback on a break below near-term support. Either way, we expect to be in the sweet spot.
We can't wait to check the charts this weekend. We will be hunting for New Trades and searching for clues on where the market is headed from here. We have said all year long 2013 could be one of the best years ever to trade options and as volatility increases down the road, we plan on being there to play the wild swings higher or lower.
As far as today's action, the Dow is currently down 28 points to 15,598 and a close above 15,600 would be bullish for next week. The S&P 500 is lower by 2 points to 1,704 and needs to hold 1,700. The Nasdaq is off 2 points to 3,673 and a close above 3,675 keeps 3,700 in play for next week. The small-caps are declining 3 points to 1,057 and anything over 1,050 for a close would be bullish.
We will be back Sunday night with the Weekly Wrap and on Monday morning with the Daily and for those of you who haven't subscribed to the Weekly Wrap, you need to. We have a small-cap stock that has cleared $7 again and once double-digits hit, shares may never see the single-digits again.
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A few years ago we pounded the table for our subscribers to buy Imax (IMAX, $25.80, down $0.04) at $3 and before the 3D craze came along and shares reached $30+ at its peak. This gem in our Weekly Wrap has the same potential.
It's been a great week and we have some last minute updates before we roll and again, our Weekly Wrap comes our Sunday night so make sure you sign-up to get a great small-cap play. Until then, have a great weekend everyone!