Morning Call: Futures Rest Pre-Market After Weak Data from China

US stock futures are flat Thursday morning, taking a pause after a massive three-day rally. Yesterday pre-market there was a perfect storm of news that sent futures romping higher. The Fed, ECB, BoJ, BoE, SNB, Bank of Canada lowered interest rates 50 bps on dollar swaps, and China lowered its reserve rate requirement 50 bps, the first cut since 2008. Futures added to early gains following a much better than expected ADP jobs number (+206,000 jobs vs. 130,000 expected). Then, data showed that October pending home sales rose 10.4% vs. the 2% expected, the biggest jump since November 2010.

All of the news above triggered a rally that took most market participants by surprise. This will keep the bears honest and the bulls on alert as the dynamics keep changing in this market.

This morning the new front is fairly quiet. China released some weak economic data and remains the elephant in the room. The European sovereign debt crisis continues to worsen, but was not allowed to become a complete disaster. If the crisis was allowed to drag on and orderly defaults would have occurred, it would have likely started to weigh heavily on China.

A metaphor being used its that yesterday’s policy action puts a full body cast around a broken back without properly aligning the vertebrae! This could keep the body from hitting the pavement for now, but does nothing to solve the underlying problem, and could make it worse.


The Dow Jones had a 750 point in three days so a rest would be nice at this stage. Bulls are firmly in control at this stage, but new buyers will want to wait for a calculated dip to enter. The S&P’s rallied all the way back to the broken down wedge from a few weeks back.

Resistance in the S&P comes into play around 1252-1255, with a bigger area around 1260-1265 (200 day moving average). If the market wants to do some downside probing look to yesterday’s intraday range of 1236-1238, and then 1224-1228.

Scott Redler
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. Scott 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, Scott 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, he maintained his status as a top trader in the industry while working closely with all traders in the firm to dramatically increase performance. Scott has participated in more than 30 triathlons and one IronMan triathlon, 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 and Bloomberg, and he has been quoted in the Wall Street Journal and Investor’s Business Daily among other publications. Scott produces much of the media and content available to subscribers and followers. is an online financial media network and education platform that provides active traders and investors with market analysis, real-time access to strategies, and in-depth training from real traders, real-time.

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