Need Help?  

1-888-998-3548 or 646-214-7240

Rally Hits Roadblock after GOP Budget Rejected

Scott Redler
Dec 19, 2012, 5:12 PM


The market slumped to a loss Wednesday, unable to continue higher after two impressive days to start to the week. The S&P hit its high of the day pre-market at$145.58, but faded right off the open. Stocks looked like they might bounce off the lows in the last hour of trading, but instead accelerated into the close. Today's action alone isn't enough to negate the bullish sentiment created in the last two days, but we will be watching closely to see what it leads to. The fiscal cliff continues to be the catalyst as today the GOP saw its budget deal rejected.


If the market can limit the damage tomorrow, this will feel like nothing more than healthy digestion. With the outcome of the fiscal cliff negotiations still very uncertain, it makes since that we chop around a bit. If you put on shorts after the potent two-day rally, I believe you could have used today's weakness to cover some and add to long positions in stocks showing relative strength. I still think we will have a bullish tone into year-end.


Banks, which have been on a tear, took the day off today. Goldman Sachs (NYSE:GS) went from around $120 to $129.30 in three days, so a rest was due. Bank of America (NYSE:BAC) put in a bit of a topping candlestick, but after its massive run that's not surprising. Citigroup (NYSE:C) held up best, dropping only a penny on the day.


There were not many standouts today in general, and we could see volatility drain further out of this market over the next two weeks. Oracle (NASDAQ:ORCL) had a very strong report and the market didn’t “sell the news,” which is another bullish sign. Most strong stocks held onto the majority of their gains from the past few days.


Apple (NASDAQ:AAPL) couldn't put in a third strong day after its Red Dog Reversal as it finished down 1.4%. Given the potency of the two-day move, it's natural to see AAPL rest a bit. The macro picture still looks a bit bearish in AAPL though, so it will important to see how well it holds up.



*DISCLOSURES: Scott Redler is long LVS, BAC. Short SPY.


Last Updated ( Wednesday, 19 December 2012 17:50 )
© 2012 T3 Live, LLC
  1. T3 LIVE, LLC is NOT a Broker Dealer. T3 LIVE, LLC engages in trader education and training. T3 LIVE, LLC offers a number of products and services, both electronically (over the internet through and in person. Through T3 TV, an online video network that is available through, T3 LIVE, LLC provides LIVE pre/post market and stock analysis. Through, T3 LIVE, LLC offers the "Virtual Trading Floor", a community through which independent traders (subscribers), as well as select T3 Trading Group, LLC Traders, observe a virtual trading floor environment (as described below) for educational purposes. T3 LIVE, LLC also offers web-based, interactive training courses on demand.
  2. Subscribers are able to see if traders are long or short and what symbols as part of best practices in regards to disclosure. Subscribers do not see trader' screens, trades or size of positions. T3 requires traders to disclose whether they are long or short and which stocks they are trading to ensure that the community is fully informed and that traders substantiate their opinions. This approach is modeled after the analyst disclosures that accompany commentary on particular stocks on CNBC or other financial news media (as per FINRA Rules 2210 and 2711).
  3. The seminars given by T3 LIVE, LLC are for educational purposes only. This information neither is, nor should be construed, as an offer, or a solicitation of an offer, to buy or sell securities. You shall be fully responsible for any investment decisions you make, and such decisions will be based solely on your evaluation of your financial circumstances, investment objectives, risk tolerance, and liquidity needs.
  4. This material is being provided to you for educational purposes only. No information presented constitutes a recommendation by T3 LIVE, LLC 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.
  5. The videos and blogs shown on T3 LIVE, LLC are for informational purposes only. The investment ideas and expressions of opinion may contain forward looking statements and should not be viewed as recommendations, personal investment advice or considered an offer to buy or sell securities. T3 LIVE, LLC statements and opinions are subject to change without notice and should be considered only as part of a diversified portfolio.
  6. T3 LIVE, LLC and T3 Trading Group, LLC are separate, but affiliated companies.
  7. T3 Trading Group, LLC is a Registered SEC Broker-Dealer and Member of the CBOE Stock Exchange (CBSX All trading conducted by contributors on Virtual Trading Floor is done through T3 Trading Group, LLC. For more information on T3 Trading Group, LLC please visit
  8. Global Trading Plus, LP (“GTP”) is the exclusive provider of T3 LIVE, LLC products in Europe, all the former Soviet Republics (dating back to 1991), and Israel. GTP is a separate company and has no common ownership with T3 LIVE, LLC, T3 Trading Group, LLC.