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POSITION: no position in the SPY here

I’m doing a lot of waiting and watching today when it comes to my index and macro short ideas. I’ve started selling immediate term TRADE longs that are overbought (SU, FL, etc), but feel like I need to be much more surgical about my re-entry point on the short side of positions like the SPY.

In the chart below I have outlined 4 important immediate term levels for the SP500: 

  1.        Intermediate term TREND resistance = 1225 (the YTD closing high, which is red because now we are making lower-highs)
  2.        Immediate term TRADE resistance = 1203
  3.        Immediate term TRADE support = 1191
  4.        Immediate term TRADE support = 1171 

The reason why I have 2 immediate term TRADE lines of support is that I don’t yet know if today’s market confirms (closes at or above) 1191. If it doesn’t, that’s immediate term bearish and there is no support to 1171. If it does, its immediate term bullish and carries risk that the SP500 can melt-up to 1203. Beyond 1203, there’s no resistance to 1225.

Aggressive selling/shorting was a better strategy a week ago. Tactical and timely selling/shorting is what I think you should be doing today.

Yours in risk management,


Keith R. McCullough
Chief Executive Officer

Bear/Bull Battle: SP500 Levels, Refreshed...  - 1