I looked in my service manual PDF file and saw no mention of compression psi. Maybe it is there I am just blind but I looked 3 times. You are not going to have high compression on most 2-strokes. I would say your 120psi number is fine especially if it was taken dry. Just so it runs good and has good power.
Just for a comparison the compression psi for the older Homelite 25cc and 30cc engines were 90psi.