POSITION: Short SPY
Before this morning’s market open we outlined daily probability (on our Macro Morning Call and in Early Look levels) of 4:1 risk (downside) versus reward (upside) in the SP500. As of 11AM EST, alongside lower prices, that’s gap is starting to narrow.
What’s bearish about today versus yesterday is that we just saw an Outside Reversal in the SP500 (higher opening highs, above the cycle high, reversing below the prior closing high of 1271). While these aren’t always bearish signals, they certainly aren’t bullish ones.
We’ll see where we close today because that’s the price that matters most, but a close below 1260 (our immediate-term TRADE line of support) would be bearish and a close above it would be bullish.
Don’t forget the Fed’s Minutes are due out intraday – we think they’ll be hawkish, on the margin. Maybe that’s why commodities are getting clocked.
Keith R. McCullough
Chief Executive Officer