• Daily Game Plan – Markets Soar on Jobs Report

    by  • May 3, 2013 1:43 pm • Broad Market Analysis, Bryan Sapp’s Daily Game Plan, Charts to Watch • 0 Comments

    MARKET CHECK

    The April employment report was released before the market open today, and the better-than-expected numbers caused a big spike in equity markets.  Not only did this month’s number beat expectations, last month’s jobs number was revised higher–further evidence that the jobs situation may be a little better than sentiment may currently indicate.  Today’s spike sent the S&P 500 to new all-time highs, and above the key psychological 1600 level that’s been in the crosshairs of many market participants.

    At present levels, we’re being led higher by small caps, as the Russell 2000 is nearly 2% higher on the day.  All other major indexes are up significantly as well, each over 1%.  After holding their bid for some time, bonds are seeing major weakness today, down over 2% on the session.  Metals are mixed, as gold is slightly lower, while silver is up nearly 1% for the session.

     

    CHART OF THE DAY

    BMC Software (BMC) – The software company has been an outperformer this year, up about 16% since January.  The shares recently spike to new multiyear highs and have since consolidated, offering a nice long entry.  Despite its strength, short interest on BMC remains elevated at 8% of the equity’s float.  Should BMC continue to travel higher, there exists the potential for short-covering rallies going forward.

    I like a long entry here with a stop on a close below 44.50.  I would initially target a move to 48, with 55 as a stretch target.

    courtesy of stockcharts.com

     

    WHAT I’M EXPECTING

    Continued pressure by the bulls.  As traders continue to try and pick tops(okay, I’m guilty at least once this past month), the bulls are still winning the battle.  Until we can see a significant break below the 50-day moving average on the S&P 500, pullbacks should be bought.  If you do try some bearish plays, do not get greedy with your profits and protect any gains that you may have.

    About

    Bryan Sapp is a Senior Trading Analyst at Schaeffer’s Investment Research, where he has specialized in volatility-based options trading since early 2010. With Bryan at the helm, Schaeffer’s Volatility Trader generated a 2012 portfolio return of 70% for subscribers. This real-time option recommendation service exclusively trades short-term straddles. Prior to joining the research team at Schaeffer’s, Bryan honed his skills as a speculator by trading his own account, and playing poker professionally to pay his way through college. Bryan attended the University of Louisville, where he received his Bachelors in Economics and an MBA with an Entrepreneurship focus.

    http://www.schaeffersresearch.com/

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