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We like to put our research views on the tape. That’s what I did on March 16th in a note titled “Short Covering Opportunity.” That’s what I am doing right here and now immediately after shorting the SP500.

While our fundamental view of Global Growth Slowing As Inflation Accelerates is becoming a consensus, that doesn’t mean consensus can’t keep being right where it matters most – in being priced into the US stock market.

Alongside The Bernank perpetuating The Inflation we’ve seen a breakout in Price Volatility (VIX). Amidst the 3-day rally we just saw in US stocks from their immediate-term TRADE oversold lows, the VIX has held its intermediate-term TREND line of 18.03.

This is not an ‘end of the world’ short position. I think of it as a high-reward versus risk short position that I can average up into if today’s spot isn’t precisely right. Provided that the SP500 doesn’t close above my TRADE and TREND lines of 1310 and 1343, respectively, Mr. Macro Market also supports this message with bearish immediate-term price momentum.

For the intermediate-term, I see a 6% risk management range developing between 1.

Short/Sell high within that range, and Cover/Buy low.


Keith R. McCullough
Chief Executive Officer

Short Selling Opportunity: SP500 Levels, Refreshed - 1