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Tim Biggam Analysis: The End of QE and Year-End Outlook

Tim Biggam discusses the end of Quantitative Easing and the market's reaction

In today's Traders Exclusive, Tim Biggam notes that although market participants anticipated the Fed announcing the end of Quantitative Easing, equity indexes had a slightly negative initial reaction to the news. The reduction of the Central Bank's liquidity injections should temper the market through year end, and Biggam anticipates a range bound trading environment, where the S&P likely vacillates between 2,000 and 1,850. With a trading range likely, selling options on the indexes becomes a particularly attractive strategy. As far as specific stock picks, Alibaba (BABA) has had a nice run off its lows near $83 and has tagged $100 a few times now, possibly getting ahead of itself and setting up to sell put spreads against. Yesterday Goldman Sachs released its 2016 earnings estimates for the S&P 500, and applying a 15x multiple projects a price level of 1,960, confirming the range bound thesis.

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