Non farm pay rolls strategies ( market expectation is for 10K jobs to be added):
The NFP release tomorrow is also potentially very beairsh for the Dow, and the market in general as we are due the release of the anuual "revision". Which could cut up to 842K jobs from the 04/2008-03/2009 payrolls!! Which would imply that the job market was worse than previously realised, at that time. I think the sheer surprise factor of seeing a big number like that could prove extremely bearish.
I expect the Dow to break 10,000 if the payrolls are flat or negative, and perhaps to break the 10,000 level in the Asian markets overnight, or early in the European morning session.
A) Non Farm Payrolls better than expected 15k-50k (I expect the dow to be around 9950, 10050 going into the results):
1)Buy the Dow, aiming for around the 10190. However I expect the dow to sell off quickly after that, as the market awakens to the continuing obstacles to the global recovery.
2) Buy Crude. Currently at around $73. To target $75.90, and may be give some back, and close around $74.70.
3)Buy mining stocks
4)Buy Large Banks
B) Non Farm Pay rolls worse than expected. -25K to -55K
1)Sell the Dow. Which should be at around 9980-10030 going into the result. I would look for an initial target for around 9930/9950. And then a further break below to the 9800 region, perhaps stabilising at 9820. With the possiblity of a further break below, after the european close, if the figure is closer to the -55k end.
2)Sell crude. Currently at $73 to targetthe $72 region intially, and then possibly break towards $70.90.
3) Sell mining stocks
4)Sell large Banks
C) Non Farm pay rolls -57K-100K
1)Same strategy as B, except I am looking for the Dollar to actually strengthen off "bad economic news" as a flight to safety and for the price of the 2Yr to go up (in contrast to the consensus view for this news result).
Any sell off in the dollar tomorrow should be looked at as a buying opportunity in my opinion. With US dollar index currently at 8022, aiming for 81-82 in the coming weeks.
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