The Wrap 1/8/9


A bounce by the buck weighed down stocks during the early going, but strength among financial issues helped carry the broader stock market to its fourth straight gain.

Six of ten sectors were in negative territory, led by telecom (-0.8%), utilities (-0.5%) and materials (-0.5%), while financials (+2.1%), industrials (+1.3%) and consumer discretionary (+0.9%) were higher.

Tomorrow morning, four economic reports are scheduled to be released before the open; 1) Average workweek (Consensus is 33.2), 2) Hourly earnings (Consensus 0.2%), 3) Nonfarm payrolls (Consensus -35K) and Unemployment rate (Consensus 10%).

Apple took a break again, which frankly I’m happy about, I would like to see a pause/pullback and then one last blast into earnings. IBM is puling back and traded about the same volume as yesterday. VNO caught a bounce and the group may move higher after a brief pause. If you agree with me that the commercial real estate group is do for a bounce, and you want more exposure to the group, DRN the 3x ETF (risky) gets you a seat at the table. It bounced nicely off the 20dma today. MEE is still a rock and we hold a 1/3 position there.VISN was basically unchanged. JPM exploded and the warrants are up over 20% to all time highs in the last week or so.

In the “I’m so pissed off” department, PRGO which we were short and took a small stop on, is now crumbling, another reason why my stops will be wider this year.

Newsflash: I have the feeling we will see a good, if not great payroll number tomorrow. Why? Because Obama is speaking about the economy tomorrow at 2:30. Unusual for a Friday no? You know he’s seen the numbers (Goldman too, hehe). President’s love to revel in good news and often find the exit at the back of the movie theater when things are bad. Just a thought but I think I’m right on this one. It could end up being a good day for the longs, we’ll see.

Please go to the P&L tab on the blog to view the spreadsheet.

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