POSITION: no position in the SP500 here
That doesn’t mean I don’t want to have a short position in the SP500 here. I want one, badly… you know it, I know it. But, for that very reason (human want), I am effectively forcing myself to wait and watch for the market’s direction into the close. This isn’t easy. It just gets less hard as you do more reps.
When making a probability-weighted decision to time a market, you have to have a point of view. In my case, the fundamental and quantitative points of view are bearish (1. Growth Slowing 2. Inflation Accelerating 3. Interconnected Risk Compounding). These factors have been bearish for the last month. It’s a lot more difficult to reconcile the timing of when that matters versus the theses themselves.
From an immediate term TRADE perspective, the SP500 broke support yesterday. Now, what was support (1191) is resistance. As a result, the bulls are in no man’s land, and they know it.
If today were to work out perfectly for me, I’d short the SPY as it pushes toward 1190-1191 into the close. Most days aren’t perfect though. That’s what keeps us all paying attention.
Immediate term TRADE support is now 1172. Beyond that, there really is no support of consequence down to 1133. That’s this market’s bullish intermediate term TREND line.
Keep managing risk proactively out there,
Keith R. McCullough
Chief Executive Officer