Still Bearish: SP500 Levels, Refreshed

POSITION: Short SPY

 

In the last 2 trading days the SP500 has sold off towards, but held, our immediate-term TRADE line of support (1173). That, not surprisingly, has my inbox ringing with questions as to why I’m not covering my short position in the SPY. Fair questions.

 

The answer relies heavily on 3 core-factors in my risk management model – PRICE, VOLATILITY, and VOLUME: 

  1. PRICE – both immediate and intermediate-term TRADE and TREND lines (TRADE = 1196, TREND = 1206) are stiff levels of new resistance.
  2. VOLATILITY – the VIX is up another +6% today and won’t calm down; it’s moved to bullish TRADE and TREND with no resistance to 23.89.
  3. VOLUME – on the intraday rallies, volume is almost laughably low; with month end (today), people haven’t capitulated selling, yet… 

Ultimately I think I’ll see my 1173 and that’s why I am patiently waiting and watching to see the river card.

 

Yours in risk management,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Still Bearish: SP500 Levels, Refreshed - 1


Another French Revolution?

"Don't be complacent," writes Hedgeye Managing Director Neil Howe. "Tectonic shifts are underway in France. Is there the prospect of the new Sixth Republic? C'est vraiment possible."

read more

Cartoon of the Day: The Trend is Your Friend

"All of the key trending macro data suggests the U.S. economy is accelerating," Hedgeye CEO Keith McCullough says.

read more

A Sneak Peek At Hedgeye's 2017 GDP Estimates

Here's an inside look at our GDP estimates versus Wall Street consensus.

read more

Cartoon of the Day: Green Thumb

So far, 64 of 498 companies in the S&P 500 have reported aggregate sales and earnings growth of 6.1% and 16.8% respectively.

read more

Europe's Battles Against Apple, Google, Innovation & Jobs

"“I am very concerned the E.U. maintains a battle against the American giants while doing everything possible to sustain so-called national champions," writes economist Daniel Lacalle. "Attacking innovation doesn’t create jobs.”

read more

An Open Letter to Pandora Management...

"Please stop leaking information to the press," writes Hedgeye Internet & Media analyst Hesham Shaaban. "You are getting in your own way, and blowing up your shareholders in the process."

read more

A 'Toxic Cocktail' Brewing for A Best Idea Short

The first quarter earnings pre-announcement today is not the end of the story for Mednax (MD). Rising labor costs and slowing volume is a toxic cocktail...

read more

Energy Stocks: Time to Buy? Here's What You Need to Know

If you're heavily-invested in Energy stocks it's been a heck of a year. Energy is the worst-performing sector in the S&P 500 year-to-date and value investors are now hunting for bargains in the oil patch. Before you buy, here's what you need to know.

read more

McCullough: ‘My 1-Minute Summary of My Institutional Meetings in NYC Yesterday’

What are even some of the smartest investors in the world missing right now?

read more

Cartoon of the Day: Political Portfolio Positioning

Leave your politics out of your portfolio.

read more

Jim Rickards Answers the Hedgeye 21

Bestselling author Jim Rickards says if he could be any animal he’d be a T-Rex. He also loves bonds and hates equities. Check out all of his answers to the Hedgeye 21.

read more

Amazon's New 'Big Idea': Ignore It At Your Own Peril

"We all see another ‘big idea’ out of Amazon (or the press making one up) just about every day," writes Retail Sector Head Brian McGough. "But whatever you do, DON’T ignore this one!"

read more