Stocks yesterday again closed at their absolute highs…third day in a row now. Volume was OK but nothing great. Commodities too rallied with Crude Oil again above $80 and copper nearlq 10% off its lows from earlier this week. Gold and silver are trading in a narrow band at the moment and we need to see some sort of near-term trend develop before getting interested again in either direction.
Our base case remains that we should see some resistance in equities soon that would get the S&P 500 to re-test the 1100 area with a higher low. We think Tuesday's lows might have been the lows for 2010 which we would likely however break again sometime in the first quarter of 2011.
Non-farm payrolls figures for the month of September will be released at 8:30 AM ET today and will surely serve as the catalyst to move this market for today.
We have just a handful of positions in Bucket 2 and 3 and are pretty much market neutral. The S&P 500 may have 3-4% to corrent at this stage and while we want to play that downside with Bucket 1 we want to spend more time looking at entry points for Bucket 2 trades.
It is a Friday and as we mostly do on Fridays…we want to take it easy today and not overtrade to risk any hard-earned gains from this week.