Scott Redler, Chief Strategist at T3Live joined us on Benzinga's Premarket Prep today to discuss how to manage geopolitical risks in the markets.
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00:00Scott, I was just looking at the years that you talked about, 2000, 2008, 2020, and now
00:08we're in 2024, all those presidential election years, right?
00:15All those years and different things.
00:18How do you...
00:19I mean, we could talk about the charts and we could talk about the fundamentals, we could
00:22talk about the valuations, the S&Ps here.
00:27But I think that all these times, those were great buying opportunities, right?
00:32With the crises and everything.
00:34How do you keep the geopolitical...
00:38I mean, we are at a point in our country and our world where you would think things are
00:45like...
00:46You should be extremely bearish, extremely bearish, the way things are transpiring.
00:51And I think you know what I'm talking about.
00:54How do you separate all that when you know what kind of potential risks are out there?
01:01Well, it depends on your account, depends on your risk, depends on your threshold.
01:06If I'm 51 years old and I have a 401k, then I put money in every single month as a chief
01:10strategic officer, I don't care.
01:12It'll help my average cost the same way the other crisis has happened.
01:15But as an active trader who trades for a living, if things start to get temperamental, like
01:21back to the chart, before the 9% moved lower, look at this candle on July 18th, we broke
01:27the eight day moving average.
01:28We had a gap down that never got filled.
01:30So technically it said the market cares about whatever the narrative was then.
01:34And then we were below all the moving averages the whole way.
01:38Listen, the other presidential elections, the same thing happened.
01:40They said the world was going to end when Trump got elected.
01:42It was down that night and they never looked back.
01:45They said the world was going to end when Brexit happened.
01:47The world was always going to end and it doesn't end.
01:49You just need to know how much risk do you have on.
01:51I tend to take more options when we get into areas that anything could happen because risk
01:56is premium paid versus being caught in a mess that you can't control.
02:02So as traders, maybe you have a little less on because there's enough volatility that
02:06if you get paid for the month, you could short a huge gap up and if it doesn't pull in, you
02:11could flip and buy them and use your charts and if big gap down, you could do the other
02:15and you could make money tactically.
02:17But I would say when we get closer to these binary events, whatever they are, and it's
02:22going to probably be the election when we move closer.
02:26First one now will be the jobs report on Friday because the street thinks we're still getting
02:30one basis point of worth of cuts and it looks like we might get a quarter in September and
02:37I don't think we can get one basis point unless Tom Lee is now changing his gears and we're
02:42going to go down 6-7%.
02:43It's 6-7% down in October.
02:46Maybe we go a quarter, then a half because of sentiment.
02:49Remember when we were down August 5th, What's-His-Name on TV was crying for a one basis point cut
02:54that day and we were still up 11% in the S&P.
02:57What the hell is that?
02:58So I'm just thinking that these binary events happen.
03:03You just have to know which account you're looking to focus on and what's in harm's way.
03:09But long-term, it doesn't matter.
03:12Obviously everyone thinks like, I don't want capital gains taxes to go up.
03:15I've paid 50% all in a bunch of years.
03:18I want to keep more than half my money.
03:20So capitalism, free enterprise, I'd rather pick which charities I want to give to than
03:27them take my money and distribute it whichever way they want, whoever that is.
03:31But I'm not going to name names and get political.