Investors Still Trying to Make Sense of European Political Shake-Up

The market extended its losing streak to six consecutive days, but once again the damage could have been much worse considering where the session opened. S&P futures were down more than 10 handles at the 9:30 bell and sold off in the first hour before rallying into the gap. Stocks went green for only a few minutes in the early afternoon before fading a bit into the close. The Dow was hit hardest, closing down 0.75%, while Nasdaq showed relative strength only shedding 0.39%.

From an active trader’s perspective, it has been a difficult environment to maneuver. Yesterday we fell hard on Europe concerns, but rallied strongly into the close to minimize the damage. Traders who perhaps bought on that reversal were left frustrated by this morning’s open and the action in the first hour, but then we rallied back to close the gap temporarily. We closed right in the middle of the day’s range, so the next leg for the market is anyone’s guess.

We are not yet at extreme oversold levels that precipitate a big snap-back type bounce, but we could easily drift or consolidate for a few days. Investors are still trying to interpret what the European political shakeup will mean for the market. Gold (GLD) fell hard again today, losing 1%, as the anti-bailout crowd gains further influence across the pond.

Apple (AAPL) led the charge in the late morning, getting into positive territory, before also losing steam. The market leader is forming a tight mini consolidation near major support from before earnings, and traders should keep a close eye on both ends of that range.

Banks have been heavy overall, but I am starting to look to buy the dip in the strongest names, always led in my mind by JP Morgan (JPM). JPM fell down near its 100-day moving average today, and I am taking a position overnight.

Disclosure: Scott Redler is long JPM, SPY.

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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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