Posted by Pete Stolcers on March 10

Posted 9:00 AM ET – Yesterday the market traded in a very tight range for most of the day. In the afternoon we saw a swift decline when oil dropped. That move was a capitulation low and oil rebounded sharply. Stocks shot higher and the market closed above SPY $237. I told you this was going to happen.

The market wanted to head higher and oil was the only thing keeping a lid on the price action. Asset Managers are prepared for a rate hike next week and the market is comfortable with this round of tightening. The comments from the ECB yesterday were also hawkish.

The reaction to the strong ADP report on Wednesday was the “tell”. This morning the Unemployment Report showed 235,000 new jobs were created. That is well above the consensus estimate.

Global and the domestic economic conditions are improving. We are at a juncture where good news is good news. Strong economic releases will be market friendly and “misses” will spark profit-taking.

For the time being investors are willing to give DC the benefit of the doubt. As long as progress is being made the market will continue to grind higher.

Swing traders should already be long calls this morning. In my comments yesterday I advised you to get long above $237 and to add if the market was grinding higher. This morning the SPY will open above $238 and you should add to positions. Use a close below SPY $237 as your stop.

Day traders should take it easy on the open. Let the early excitement run its course and wait for a pullback. The dip should be relatively shallow. Use SPY $238 as your guide. As long as we are above it, trade from the long side. If we trade below it, be patient and wait for it to get back above that level.

Yesterday we were extremely patient in the day trading chat room. We did not trade much early in the day. When I saw the decline I told members to be ready to buy. As soon as I saw oil establish support we started to buy. This is exactly what outlined in my comments yesterday and I hope you took advantage of the move.

Look for a grind higher today.

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