The Markets React to Another Round of Global Stimulus

Markets have been enjoying a nice rally since last Friday’s EU summit, even though it seems like 95% of the news has been negative since then. The markets have ignored it all, and hopes for more stimulus and market mechanics have been in control. Tons of guys were caught short during the end of the quarter mark ups and new flows.

So far this morning, futures just got a pop as the Bank of England leaves key rates alone but says it will do more QE. China did cut rates, and now all we need is the ECB at 7:45. Once all this news is out, perhaps the market will take a rest.

I do think it will be better tactically to short the SPY above $137.50 up to $139.50, as my oscillator is +80ish – higher than we’ve seen all year. So if you aren’t caught short from last week, this last squeeze can be a nice opportunity to sell some left over longs and tactically short the SPY. We do have three pieces of jobs data today as well as the big one tomorrow, so it won’t be easy.

Tuesday’s high on the SPY is $137.51, and then the major zone starts at $138.66 up to $138.99 above the open gap. The measured move of the inverted head and shoulders pattern is to right around there, but stretches up to $139.50ish

The go-to stocks we talk about have all had $10-$30 moves this week, so booking some profits, or selling, or hedging in some way makes sense. Even the laggard sectors had spirited moves that lasted for more than a few days.

Disclosure: Scott Redler is long FB, NFLX, FIO, VMW, V, AAPL, and GLD and short 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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