Market Lab Report - Premarket Pulse 8/25/15
That said, China lowered interest rates and reserve requirements overnight as it struggles to rescue its crashing markets. The Shanghai Index still closed down -7.6%. The move by the People's Bank of China, however, sent U.S. futures higher on both the NASDAQ and S&P 500 by almost 4% at the time of this writing. Dow futures are up over 600 points. There is also talk that the Fed may have no choice but to start a new round of quantitative easing, a la QE4 should the global economy sink into recession. Of course, there is ample evidence that quantitative easing which began in late 2008 does little to jump start economies. QE is a band-aid over a deeply infected wound.
AS we discussed yesterday before the open, using the gap-down capitulation move at the open to cover short positions, namely in TSLA which reached a low of 195, nearly 30% below where we recommended the stock as a short in the 260 area early last week. The stock is now rallying up to its 200-day moving average, which brings it back into shortable range using the line as a guide for an upside stop.
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