POSITION: Short SP500 (SPY)
Fortunately, I didn’t waver this morning. All I did was sell. While I’m running out of long positions to sell, the bulls are running out of time.
Bearish intermediate term TREND signals have been developing since October 13th. In the last few trading days we’ve picked up some very bearish immediate term TRADE signals. Today’s intraday reversal in US equities only adds to a growing list of market risks.
The most problematic risk factors in the immediate term are:
- TIME – the bulls have no time left on the bullish catalyst clock (Midterms and Quantitative Guessing)
- PRICE – both from an immediate term TRADE and RANGE perspective, signals are bearish (TRADE line resistance = lower-high of 1188)
- VOLATILITY – last week’s bullish immediate term TRADE breakout in VIX (+12.8% w/w) is being confirmed by another +3% rise today
For the rest of my reasoning (Growth Slowing, Inflation Rising, and Interconnected Risk Compounding) please see my EL note from Friday titled “Drowning in Sweat.”
Immediate term TRADE support is now 1167. Today was a great day for risk management.
Keith R. McCullough
Chief Executive Officer