It's always fun on days when Janet speaks.
Our FOMC chairwoman speaks TWICE today in Philadelphia (again at 2pm), so all sorts of fun this afternoon. You know our game plan – we're short the S&P Futures (/ES) below the 2,100 line. They are now 2,101.50 after hitting 2,082.50 on Friday, before the spectacular recovery and it's yet another example of why you need to have Futures Trading as part of your market tool-belt as we had a FANTASTIC time collecting money on our shorts off the Non-Farm Payroll disaster but only the very, very quick were able to profit from the action once the market opened.
There was certainly nothing in Friday's data that made me change my mind about 2,100 being a top, along with 17,850 on the Dow (/YM), 4,525 on the Nasdaq (/NQ), 1,160 on the Russell (/TF) and 17,200 on the Nikkei (/NKD) and we're over a couple and under a couple and we use a 3 of 5 rule to set direction and the direction should be down this morning and I don't see how Yellen is going to reverse that since she either stays the course, which is tightening by summer or she flip-flops based on a single jobs report and appears weak in her convictions – it's a lose-lose.
By the way, I don't want to come across as a perma-bear – we're just being cautious into the summer, where we expect a correction but then we'll be happy to buy again. In fact, we just reviewed our Top Trade Alerts for the months of March and April and only one trade idea was bearish (CVX) and it turned out to be one of our only two misses for the period against 16 winning trades. That would be impressive but it actually bought our average down as we were 16 for 16 in January and February!
As I noted to our Top Trade Members at the end of the review:
Bear in mind we are NOT encouraging holding a lot of open trades at the moment as we expect a sell-off in the summer. If you take anything away from these reviews it should be that you should