Fed Minutes Fuel Late Market Rally

After a morning sell-off Wednesday, the S&P and Nasdaq rebounded back into positive territory while the Dow slumped to a small loss. Accelerating afternoon gains were dovish FOMC minutes, which indicated QE3 may not be far off. Markets seemed to be expecting some sort of policy action at the most recent meetings of both the US Fed and ECB; none came, but stocks moved higher anyway. Perhaps now we know why.

In the minutes today, Fed governors indicated that justification for further bond purchases was growing as the economic and employment picture remained bleak, and the FOMC may choose to begin QE3 in the not-too-distant future. Words, as has been customary, remain one of the Fed’s strongest policy tools. Precious metals, always sensitive to Central Bank announcements, spiked on the inflationary news. Gold (GLD) and Silver (SLV) gapped up on Tuesday in anticipation of the Fed minutes, the first real catalyst for those commodities in weeks. Both GLD and SLV remain in macro descending triangle patterns, and now look more likely to break it to the upside.

Apple (AAPL), and tech in general, helped the market rebound by putting in a sharp reversal following yesterday’s sell-off. AAPL traded down through the low from the previous two days around $650, and reversed back above it, my mini Red Dog reversal signal to get back in long. I caught a nice trade in AAPL and closed out the majority of my position for a nice quick cash flow trade.

Amazon (AMZN) also briefly broke above pivot highs before fading in the last hour, and Baidu (BIDU) staged an impressive comeback after gapping lower and initially selling off hard this morning.

Disclosure: Scott Redler is long GOOG, AAPL, BIDU, LNKD, SLV. 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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