We're back to jobs again. The report comes out tomorrow and it seems that the market is waiting for this report. We dipped a bit below that 995 level on the S&P 500 but we moved right back up into the range between 1007 and 995. We'll see which way we break tomorrow. I have some calls on the SPY that I bought a couple of days ago. I bought a couple of puts going into today's close because I really don't know which way we will break. I can see good arguments for either breakout. The puts I bought help create a Strangle trade. These trades are used when you expect a big move (up or down), but you're not quite sure which way it will move. I'm actually set up to make a slight profit on a big downward move, or a bigger profit on a breakout to the upside. For those that want to learn this strategy, make plans to take our Advanced Option Strategies course (Course 2) where I teach the details of this trade. I can now sleep well going into tomorrow's report. I was hoping for a clue going into today's close as to the more likely direction, but we closed back in no man's land so I set up the Strangle. We did close right at the 5 day moving average on the SPY. The Nasdaq has broken below its 5 day moving average and is sitting right on its 10 day moving average. I go back to what I've said the last few days...the Nasdaq led this rally and it might be leading the pullback. If the Tech stocks don't start to rebound soon, I don't see anything else strong enough to keep the whole market from starting to move lower...and please don't tell me the banks will take over. That's a hard sell for me.
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