The jobs report today was a non-event. There are buyers and sellers and that this is a “dead spot” for the market. I am expecting a trading range for the next month and a half and we are heading into a news vacuum.

From a swing perspective, I am watching US 10-Year Treasuries. If the uptrend line is broken on a daily chart it will be a sign that interest rates are creeping higher. It could be because the Fed is getting closer to tapering or it could be that inflation is “hot”. In either case, higher interest rates would spark profit taking in stocks.

I am also watching China’s market (FXI). It is in bear market territory and until the “growth engine” for the global economy shows some signs of strength the S&P 500 will not be able to breakout.

Domestic economic conditions are improving rapidly. ISM manufacturing was above 61 and ISM non-manufacturing was above 64. ADP reported that almost a million new jobs were created in the private sector during the month of May. These are incredibly strong numbers and they are contrary to the soft jobs report today. There were only 559,000 jobs created in May and that is well below the consensus estimate (720,000). The good news is that hourly wages were only up .5% vs .7% last month. This will take some pressure off of inflation fears. Surprisingly, there was only a minor upward revision to the April jobs number. I don’t trust the BLS number… at all.

The opposing market forces are strong and I believe the S&P 500 will stay in a trading range between 4000 and 4200 for at least a month. Don’t chase rallies, buy dips.

Swing traders should be on the sidelines waiting for the next market drop. Have your bullish stocks ready because you won’t have more than a day or two to enter your bullish put spreads. Stocks with relative strength and heavy volume that are breaking out through technical resistance are your best plays. Sell the out of the money bullish put spreads below technical support and let accelerated time premium decay work its magic. This is a light new cycle and we are heading into the summer doldrums. A drop to the 50-day MA on the SPY would be a good level to sell another round of bullish put spreads.

Day traders should take advantage of sector rotation. Option Stalker finds these stocks and the list changes daily. One day energy stocks are hot, the next day Chinese stocks are hot and the next day MEME stocks are hot. I don’t care which sector or group is getting the “love”, I am riding the move as long as I can and then I am taking profits. I am also concentrating on only a few stocks each day. If the market is providing a strong tailwind I will stick with the trade longer. If the market is range bound and choppy I set passive targets. MASSIVE VOLUME IS A MUST FOR DAY TRADING. No massive volume – no trade!!!! The stock must do all of the work itself.

The jobs report is the last piece of major news we will get for a couple of weeks and it is a great big “nothing burger”. The market is moving higher on the notion that the Fed will not have to tighten soon and that hourly wages are not jumping. After the initial move higher I believe the price action will come to a grinding halt.

Support is at SPY $418 and resistance is at $421 and the all-time high.