Climbing the Wall of Doom

Futures are up a bit after yesterday’s quiet action. The markets did a good job digesting last week’s powerful gains as the Fed starts its two day meeting. Statements will be released on Wednesday at 2:15. On Thursday, the ECB’s Drahgi will have his turn to shoot some rounds with that Bazooka he promised last week. Most people I talk to still hate the market and think that this is a time to sell the strength. I’m not so sure, as there is a lot of participation across sectors and markets continue to climb the “Wall of Doom” (typically it climbs a wall of worry). You don’t have to be “all in” or chase the tape, but rolling up shorts and fighting the rally since the June lows with a thesis has not been fun for those with that plan. It’s hard enough trying to be flexible.

If SPX continues to hold 1374-1376 throughout the course of this week, there are enough trapped shorts and money on the sidelines to push us up to 1395-1405, and then perhaps all the way to 1415-1422. We are at the upper end of the channel which has been a better place to sell than to buy. In the same way, buying on the lower end has been better than selling. So keep it light and know your levels as the headlines start rolling in.

P.S. I know there are a lot of problems out there. Our markets bottomed over 4 year years ago and we still have a ton of them here in the U.S. Typically when the “World is Fixed” or economies are humming, markets are close to a top. I stand by the macro thesis of S&P 1700 by 2015 over the bear case of S&P 1000 by 2015.

Disclosure: Scott Redler is long LVS

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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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