Thread: CNBC wedge - technical analysis by Scott Redler

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  1. #1

    Default CNBC wedge - technical analysis by Scott Redler

    Did anyone listen to the interview this morning with the technical analyst on CNBC who discussed the wedge formed on the major indicies? He said that the market will likely continue in the direction of the break, which I agree with. He also said the the break would most likely be to the upside, which I disagree with.
  2. #2


    YA, thought that was interesting. We haven't reached the inflection point yet. Could come soon or in weeks. Would be a good time to be overweight in cash. That way one could jump in either direction. :hmmmm2:
  3. #3


    There is a wedge formation occuring but keep in mind that wedges most often signal continuation of a prior trend and more rarely a reversal. While there is a bullish wedge forming it likely will not signal a reversal as trend normally will prevail. In addition the troughs are not as even as they would be in an ideal wedge and so far we have no substantial volume breakout which would reinforce a reversal.
  4. #4


    Topics:Federal Reserve | Currencies | Stock Market | Investment Strategy
    Sectors:Oil and Gas
    The Philly Fed's poor business conditions reading put a dent in stocks and gave the "stagflation" chorus more proof that the economy is slowing. But interesting were comments from J.P. Morgan's David Kelly on "Squawk on the Street" today. He says an important component, necessary to support the idea that inflation is rising as the economy slows is actually missing from the current economic picture.

    "We're not going to have stagflation," he said. "Inflation is a lagging economic indicator. You've got this slowdown in economic growth. It's going to take the wind out of wages, and in fact wage growth has been slowing for over a year now, on a year-over-year basis."

    "Inflation is always and everywhere a wage phenomenon in this economy. If you don't get a big increase in wages, you're not going to have big inflation," said Kelly, who is chief market strategist with J.P. Morgan Funds.

    Kelly did say the big drop in the Philly Fed's index was a surprise. "It got weaker. It does show that manufacturing is in some serious trouble," he said, noting though that manufacturing only accounts for 10 percent of the U.S. work force.
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    He also said the economic stimulus package should start kicking in during the second quarter as government checks start going out in May. The stimulus could add a percent to GDP in the second, third, and fourth quarter, and if there is a recession it would be very short and mild.

    "I think stocks are looking cheap here. This is a good time for investors to keep their nerve," he said.

    Getting Technical
    You may be noticing more technical analysts on CNBC these days. As BlackRock's Bob Doll told us recently, in a market like this, everybody turns to their technician. I took him to mean a market that lacks logic and is unclear about fundamentals. And quite possibly, if you go with your gut, you'll be wrong. So bring on the technicians.

    "Squawk on the Street" brought on Scott Redler, chief strategic officer with T3 Capital chief strategist

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