While there has generally been a “tradition” that the stock markets would undergo an end-of-the-year rally – and the markets have seen some upward movement the last couple trading sessions following a weeklong re-election bear market – there is one analyst who said that any rally that may be dramatic could be stunted by “bears” at the top end of the S&P Index rally.
Scott Redler, a market analyst for T3live.com spoke on Bloomberg TV Tuesday morning discussing the overall tone of the markets after they showed some live the last couple of sessions. When asked about S&P futures showing flat in the wake of a Moody’s downgrade and the Monday news that Hewlett-Packard Company (NASDAQ:HPQ) reported a writeoff of nearly $9 billion, Redler said the futures status was “very constructive.” He went on to say, “Today, with the Moddy’s downgrade and Hewlett-Packard, I think there is demand for stocks. So what I like to do is see the market hold here (about 1380 on the S&P 500), hold higher, show some commitment. If we can hold at above 1,375 for the next few sessions, then I think we’ll see a follow-through move that could take us well north of 1,400.”
When then asked about the resistance level on the S&P if the market heads above 1,400, Redler said, “There is a micro point at about 1,391 and another at about 1,403 or 1,407. So again, if we hold at this level, we’ll then see a push to … about 1,391, and then I think the bears will come in and make a stand at about the 1,403 to 1,408 area.” Redler did not elaborate on the reasons for the resistance.
We’d like your opinion – what do you think about the broader market? Is it on sale at these levels, or do you still see some more movement? In which direction, and when would you consider playing a SPDR, for example? Is Mr. Redler accurate on some level in his assessment? Where do you disagree, and why?