POSITION: No position in SPY
In this morning’s Early Look I posed the simple question: Quake or Correction?
I answered the question with Correction – and no that doesn’t mean I am bullish on US Equities. It doesn’t mean I am bearish at every time and price either. I’m trying my best to be Duration Agnostic.
1. The TRADE - from an immediate-term TRADE perspective, the SP500 is oversold at the 1288 line (see chart). It will also be immediate-term TRADE overbought on The Bounce at the 1312 line. Therefore 1 is the immediate-term TRADE range and I plan on managing my risk exposures accordingly.
2. The TREND – from an intermediate-term TREND perspective, the SP500 is overbought and oversold at 1343 and 1265, respectively. Therefore 1 is the intermediate-term TREND range and I plan on managing my risk exposures in the intermediate-term accordingly.
There should be plenty of emotion around the 1301 line. That’s the 50-day moving average that, for better or worse, a lot of people without a multi-factor, multi-duration, risk management process use. So watch the VIX, USD, and OIL as you keep all of the factors in mind.
Keith R. McCullough
Chief Executive Officer