Is Today’s Sell-Off a Buying Opportunity, or Start of Next Leg Lower?

All major US indices fell more than 1% Wednesday, led to the downside by the S&P, which fell 1.43%. Financials and energy stocks were the biggest drag on the index, which saw each of its 10 sectors finish in the red. The pressure continues to mount on Spain’s banking system, with reports suggesting the country will need to tap into Eurozone bailout funds to recapitalize its third largest bank and largest lender, Bankia ES. A disappointing pending home sales number didn’t help the cause, either.

Apple (AAPL) was once again a standout, breaking above a key pivot and closing the day up 1.21%. AAPL’s strength helped the Nasdaq to limit some of the damage, but the index still finished down 1.17%. Former tech leader Priceline (PCLN) has started to weaken, and couldn’t match AAPL’s bounce today, finishing down 3.08%. The stock closed just below its 100-day moving average, and could be set for a bigger pull-in.

Banking issues across the pond inevitably weighed in US banks as well, with the Financial SPDR ETF (XLF) closing down 2.04%. The banks have yet to get any significant bounce since the JPM trading debacle was revealed, and on longer term charts the rally in Q1 2012 looks to be nothing more than a dead cat bounce. There is certainly nothing healthy about the financial sector right now, fundamentally or technically.

With major headlines hitting the market every day, we once again find ourselves in a whippy, volatile type from day to day. In this environment, we like to go to more cash and take trades more quickly. The market is in a bit of a no-man’s land after yesterday’s island candlestick, and it’s best to be a very select stock picker at this stage.

Disclosure: Scott Redler is long AAPL. Short QQQ, WMT.

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.

Visit: T3Live

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