PreMarket Prep: Alibaba, The Jobs Number And Market Structure Discussion

It was all about the jobs number on Friday.

Technical Set-Up In Futures Ahead Of the Jobs Number

One of the most frequent sayings on PreMarket Prep and among other market participants, "buy the dip" was reiterated on Friday's show.

Co-host Dennis Dick, who added more shares of the SPDR S&P 500 ETF SPY to his long-term holdings last week, referenced Thursday's action as further evidence to support this saying.

After making a new all-time high on Wednesday, the S&P 500 index was trading just off the lows for the week heading into the final hour of trading on Thursday. However, the index at first began to creep higher and had a final burst at the end of the session that enabled it to recoup much of its earlier losses.

From a technical perspective, the only identifiable resistance was the after-hours high at 3,055.00. Investors were encouraged to use that level as a potential target and for those still trying to short the market, a place to throw in the towel.

Early in the session, the index surpassed that level, reaching 3,062 with over four hours remaining in the session.

What To Make Of The Price Action In Alibaba

Despite a fiscal second-quarter beat of 33 cents, Alibaba BABA was in the red when being discussed on today's show.

After spiking to $182 in pre-market trading following the print, the issue retreated to the $174 area when it was being discussed on the show. The author of this article identified Wednesday's low of $173.94 as support level if was one tempted to buy the dip in this issue.

The issue did breach that level in pre-market trading, only dipping to $173.30 before mounting a rally into the open. During the regular session, it did not come near that level, bottoming at $177.27 off the open and rallying to match the pre-market high $182.12, but drifted back and made a new low for the session.

Market Structure Talk

In this fragmented trading world, strange things happen each and every day. For example, on Thursday at 10:27 a.m. EST, Apple AAPL spiked down nearly $10 lower for no real reason.

On the today's show, the trade was examined by Dennis Dick, who coincidentally is a market structure expert. He identified the trade "as a trade through," when the 100 share lot, traded "through" the best available price on other exchanges, which occurs due to inefficient order routing and market fragmentation.

The print took place on (BATS-Y), which is a smaller exchange, that did not have sufficient liquidity to fill the order inside the NBBO (National Best Bid And Offer).

This unexplained price action is the direct result of SEC Rule 611, that only protects the top of the order book.

Talking Auto Stocks In The Motor City With Michelle Krebs

Midway through the show, Michelle Krebs of Cox Automotive joined the broadcast to discuss automobile stocks. She made comments on earnings and the prospects for new vehicle sales.

On Monday's show, Jeff Mills, the CIO of BMT Wealth Management, will discuss his investment strategies heading into the New Year.