The S&P closed higher on Thursday ahead of what’s expected to be a strong jobs number.
The session wasn’t an easy one. Again stocks seesawed, with sentiment shifting between optimism and pessimism due to a variety of factors, including euro weakness, monthly same store sales and private sector employment data.
However the biggest challenge for the stock market appears to be technical.
The S&P 500 bumped up against its 200-day moving average and failed to break through -- the third time it has done so in the last five sessions, according to Bespoke Investment Group. A break through that 1,106.26 level would be a bullish signal.
Will Friday’s jobs report provide the catalyst to take this market higher?
Instant Insights with the Fast Money traders
We kissed the 200-day moving average around noontime and then pulled back, explains Tim Seymour. Also volume was light. On top of that the Street is shortvolatility which I thinks is crazy. Those are things that give me fear as and investor.
It really seems to me like we’re on the upper end of the range in the S&P, echoes Guy Adami. 1105 had been support and now it’s become resistance. Also, the market has priced in a strong jobs report already. I lean to the bearish camp.
I’m noticing a lot of put buying but I don't think it's a bet lower; I think it’s protective buying and maybe it provides a floor in the market, says Pete Najarian.
I think we've seen the abyss and don't expect to see a deep precipitous fall in the marketplace, adds Joe Terranova. The euro is still declining but the S&P isn't rolling over as it was and that's positive. Also oil is stabilizing and Treasurys are no longer attracting safe haven investors the way they were. That gives me confidence.
No matter which way you lean, if you're looking for a barometer watch Goldman Sachs, Cliffs and Freeport , adds Najarian. It seems when these break to the upside or the downside the market seems to follow.
The action seems very typical of a corrective period, adds Brian Kelly. Economic bellwether copper is trading down while another bellwether tech is trading up which suggests the market is confused. I’m long but because I think the rally has some legs but not for long.
If you're looking for a trading thesis, I expect to see a rotation out of consumer discretionary names and into quality names such as tech and energy, adds Joe Terranova.
BREAKING NEWS: SINGLE STOCK CIRCUIT BREAKERS
Sources tell CNBC that the SEC’s new single stock circuit breaker rules will likely go into effect next week.
The proposed rules, created in response to the May 6 market plunge, would halt trading in a stock for five minutes “in the event that the stock experiences a 10 percent change in price (up or down) over the preceding five minutes.” The halt is only applicable between 9:45am and 3:45pm, and initially involves only the stocks in the S&P 500 index. The rules would be in effect at least through December 10, 2010, which currently marks the last day of the pilot period.
Since the SEC’s announcement a couple of weeks ago, the proposed rules have been subject to a 10-day open comment period. That comment period ends today.
Following this period, staff members at the SEC will review the comments and make a recommendation to the Commission. The Commission will then vote on the rules, and upon approval, those rules will be sent to the exchanges for implementation.
While a specific launch date has not officially been set yet, the SEC tells CNBC that the “Commission expects to act expeditiously” following the termination of the 10-day comment period today. However, sources tell CNBC that the new rules could be enacted as early as this Monday (June 7), and if not then, probably by the middle of next week. The actual launch date is dependent on when the SEC votes on the rules, and that specific date has not been determined yet.
Some sources say the rollout of the rules for each of the 500 S&P stocks will be done gradually, likely over the course of a week. This would help ensure the systems are operating properly. On the first day, only a handful of stocks will be subject to the new circuit breaker rules. Following that, the rules would be expanded to the other S&P 500 stocks gradually over the course of a one-week period.
What’s the trade?
The takeaway is that you need protection in this market, counsels Pete Najarian. But I wouldn’t rely on circuit breakers, I’d buy protective puts.
BULL MARKET OR BS: DANGER OF THE HERD MENTALITY
Data just released by Abel Noser shows that Apple was the single most actively traded stock in May.
But was there any fundamental reason for all that interest or was Apple just a trading vehicle for hedge funds?
CNBC senior stocks commentator Herb Greenberg has a lot to say about the issue. Watch the video and get all the details.
BP DEFENDS ITS DIVIDEND
Traders and analysts alike continue to argue over whether or not BP should cut its dividend as it incurs millions in cost to cap the oil spill.
Earlier today BP's CEO made it clear where he stands on the dividend debate:
He said, “We will meet our obligations to all our stakeholders, we'll meet our obligations to the gulf coast to restore the environment to clean up the oil. We'll meet our obligations with respect to restoring confidence and trust with the American people. We will meet our obligations to all stakeholders.”
What’s the trade?
As far as I’m concerned, anyone who’s taking a shot at BP is throwing darts, says Tim Seymour.
I wouldn’t buy the stock for dividend yield, counsels Pete Najarian, but you might want to play it for a bounce. However, I’d only play it with options so you know your downside.
I’m a buyer of Halliburton, Schlumberger and Baker Hughes, says Joe Terranova. Only 5% of the revenue comes from the Gulf of Mexico.
In the space I think Anadarko is a name that’s oversold, adds Tim Seymour.
COMMODITIES AT CROSSROADS
The commodity space was at a crossroads Thursday with nat gas and oil experiencing big gains, but copper , often seen as a barometer for the economy slumping.
What’s the trade?
I’m watching FCX , says Guy Adami. $65 had been a level of support.
FINANCE MINSITERS MEET TO AVOID EURO COLLAPSE
CNBC’s Steve Liesman sat down with Tim Geithner ahead of the Treasury Secretary's meeting with the rest of the G20.
What must you know about this conversation. Watch the video now and find out!
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Trader disclosure: On June 3, 2010, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s Fast Money were owned by the Fast Money traders; Adami Owns (AGU), (C), (GS), (INTC), (MSFT), (NUE), (BTU); Kelly Owns (STD) Calls; Kelly Owns (IBM) Calls; Kelly Owns (NBG) Calls; Najarian Owns (C) Calls; Najarian Owns (HK) Call Spread; Najarian Owns (JEC) Call Spread; Najarian Owns (LCC) Calls Spread; Najarian Owns (NOVL) Calls; Najarian Owns (SD) Call Spread; Terranova Owns (RIG), (RSX), (TER), (AXP), (BMO), (BBY), (DIS), (XCO), (IPSU), (SWN), (AAPL), (APA), (UPL), (CVS), (IPI), (TEVA), (FXB), (GLD)
Terranova Works For (VRTS)
Terranova Is Chief Market Strategist Of Virtus Investment Partners, Ltd.
Virtus Investment Partners Owns More Than 1% Of (AMKR)
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Virtus Investment Partners Owns More Than 1% Of (DBV)
Virtus Investment Partners Owns More Than 1% Of (XLB)
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For Brian Kelly
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Kanundrum Capital Owns (STD)
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Kanundrum Capital Owns (IBM)
For Brian Stutland
Stutland Equities Is A Market Maker In VIX And SPX Futures And Options
Stutland Equities Is A Market Maker In VXX Options
Stutland Is Long U.S. Treasuries
For Paul Sankey
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