Morning Call: Look for Economic Data to Drive the Tape the Rest of the Week

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May 31, 2012 9:59am NASDAQ:QQQ NASDAQ:QQQQ

US stock futures point to a higher open Thursday after ECB President Mario Draghi said the central bank will keep supporting solvent Euro zone banks. It’s not really “new” news, but something for hungry bulls to latch onto. Also, it is the last day of the month and

there is often some peculiar window-dressing type action. Markets sold off hard yesterday as headlines continue to get more complicated, and the technicals are getting worse for many sectors/stocks. I still have the mindset that this is a rally to sell!

Indices are building a classic Bear Flag Pattern, which typically this is an indication that the downside should continue. Last May I stated with 75% confidence that we see S&P 1300.

S&P 500 Could Correct to 1300-1320 Tuesday, 8 May 2012 6:13 PM ET Scott Redler, Chief Strategic Officer, says the S&P 500 could correct to 1300-1320, which would make it a compelling area to buy Source:

I’m going to use that same 75% confidence level that we have not seen the lows for the Summer. Traders like to measure risk, and you can be short this market and put a stop at 1334-1339, which is huge resistance.

There is some Heavy U.S Data coming out today and tomorrow, which will surely influence the trade. Using a tier system and knowing your time frame is the key for success here! Today we have GDP and ADP, and tomorrow we have the big jobs report.

A 60minute/Daily close below 1307-1310 would be a spot that sets the downside in motion. The level under that is 1291-1295. A close below this level and the 200day moving average is 1283. I put a 50% chance markets see 1244-1255.

I trade for a living and provide strategy on both a Micro and Macro level for thousands of market participants. Figure out where you fit in and make sure you can handle it. I will be actively trading all Summer on all different timeframes based on the Set ups!

Each day I have a Price Point sheet that identifies Cash flow opportunities for guys that hit the key boards each day, and at night we give chart visuals that can set up more macro-swing type trades for those not as active. There is something for everyone.

We are seeing a separation of the Have’s and Have Not’s in this market, so be extra careful with your stock selection. Remember, cash is a position and you probably should be in at least 70% of it.

Apple (NASDAQ:AAPL) is a great example of how you can trade multiple strategies and multiple timeframes based on the type of market participant you are. I’ve pounded the pavement on this for a swing long around $537-543, as well as multiple cash flow opportunities as it triggered for an additional trade above $574-576.40. It’s opening over $580, book some and trail some as the next major resistance is $587-592!

I will say strong stocks are hard to trust in a correction type environment as they are used for distribution. High level stops are almost as important as lower level stops. Protect winners and look for faulty signals to sell or add shorts.

Gold (NYSEARCA:GLD) is in a very important spot. This should be resolved within a week. It’s trying to hold $148.27-148.75, which was a good level to know yesterday. It needs to break above $153.50-$155.50 soon** otherwise below that Key area and you can see a move all the way to $140-141 and perhaps lower. A lot of lower pivots are being put in place in all sectors.

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all tradingstrategiesfor 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 tradingequities for more than 10 years and has more recently received widespread recognition from the financialcommunity 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 tradersin the firm. As a manager at Sperling Enterprises, he maintained his status as a top trader in the industry while working closely with all tradersin 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 Businessand Bloomberg, and he has been quoted in the Wall StreetJournaland Investor’s BusinessDaily 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.   This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by T3 LIVE or its affiliates to buy, sell or hold any security, financial product or instrument discussed therein or to engage in any specific investment strategy. The content neither is, nor should be construed as, an offer, or a solicitation of an offer, to buy, sell, or hold any securities. You are fully responsible for any investment decisions you make. Such decisions should be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance and liquidity needs.Visit the T3Live Homepage, Virtual Trading Floor, and Learn More About Us.


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