Market Could See End of Quarter Profit Taking

We are now going on Day three of the slide that started Tuesday Afternoon. After a big move from the December 20th Gap and Go selling some longs into the end of the Quarter#1 made sense. There is always a re-shuffle that goes on from Qtr. to Qtr. so the market needed to prove to me that a portfolio approach still made sense. Overseas markets continue to slide as China slowing fears continue to rise and Sovereign Debt Chatter continues to make rounds about Spain and some other European nations.

As of now, this is the same “Type” of correction we’ve seen during this multi month move. The question is? Will it be different this time. IBD Investor’s Business Daily put the “Big Picture” in “Rally Under Pressure” this is the first time they’ve done so since December 20th. So If you didn’t respect my warnings on Tuesday afternoon, you should acknowledge their perspective. One more Distribution day and then it turns into “Market Correction” so the next 1-4 sessions will be important to watch also considering we get to see what the “Composure” feels like once this First Quarter is in the books.

$SPX Micro Support is yesterday’s low- 1397** Same level for the SPY is 139.64

The 20day moving average for SPX is 1387** Same level for the SPY is 138.94

$SPX resistance is now the 10day moving average at 1404** Same level for SPY is 140.46

Late afternoon Yesterday the Banks and Some Very strong High Beta Tech like Apple (AAPL) and Google (GOOG) helped to take us off our lows.

See if any strength returns there.

Retail /RTH looks a bit tired as well. I would watch this group closely to see if they can maintain their leadership composure.

I do think the prudent thing now is to be very flexible. I will just actively trade both long and short until I get more clarity on what the next bigger move will be. Depending on your time frame. I feel you should do the same. Macro investors should be in TIER#1 at most right now.

Momentum and Intermediate trend watchers who can make quick moves should have went to Cash or Net short with me Tuesday.

The McClellan Oscillator is on -10ish – so we are not “very oversold” yet. But if you didn’t cover some shorts yesterday this down open would be a decent spot

ZNGA– a stock I’ve played a few times priced their secondary at $12– I will see if there is an opportunity to buy in that area for a active trade or a swing long.

Disclosure: Scott Redler is long ZNGA, CZR.

About Scott Redler 367 Articles

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader.

Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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