Gravity: SP500 Levels, Refreshed

POSITION: no position in SPY


No position could very well change by the end of the day/week. I am predisposed to be short here, but I need to manage that risk. The US stock market has been down for 3 consecutive days and 4 consecutive weeks, so mean reversion is a relevant bullish factor to consider.


What I am doing right here and now (1PM EST) is waiting and watching on a confirmation of a TREND line breakdown in the SP500 (1322). It’s already been confirmed by a broader intermediate-term TREND breakdown in the Russell2000 and many other Global Equity market barometers (Nikkei, Sensex, Hang Seng, FTSE, CAC, IBEX, etc). These breakdowns coincide with Global Growth Slowing.


Under most free market scenarios, a SUPPLY (more stocks for sale), DEMAND (growth slowing), and PRICE (TREND line breakdown) model should suffice. However, Americans have signed off on the 4th factor (The Bernank) and, while that’s sad, it’s still a very relevant risk.


What could the Fiat Fools do to keep this market levitating on low-volume above our intermediate-term TREND line of 1322? That’s easy - blow up the US Dollar. The USD is down today, so stocks are up – barely.


And that’s the longer-term point - defying the laws of SUPPLY/DEMAND/PRICE (or gravity) can only convince people for so long  - and that’s why this market is still bearish on its longest of long-term TAIL durations (resistance = 1377, a lower long-term high)


If gravity takes over (1322 doesn’t hold), 1308 is now your immediate-term downside target of support.



Keith R. McCullough
Chief Executive Officer


Gravity: SP500 Levels, Refreshed - 1

Cartoon of the Day: 'Biggest Tax Cut Ever'

President Donald Trump's economic team unveiled what he called last week, "the biggest tax cut we’ve ever had.” Before you get too excited about that hang on a sec. "Trump Tax Reform ain’t gettin’ done anytime soon," Hedgeye CEO Keith McCullough wrote in today's Early Look.

read more

Neurofinance: The Psychology Behind When To Sell A Bull Market

"Most momentum investors stay invested too long, under-reacting and holding tight after truly bad news finally arrives to break the trend," writes MarketPsych's Richard Peterson.

read more

Energy Stocks: Time to Buy the Dip? | $XLE

What the heck is happening in the Energy sector (XLE)? Energy stocks have trailed the S&P 500 by a whopping 15% in 2017. Before you buy the dip, here's what you need to know.

read more

Cartoon of the Day: Hard-Headed Bears

How's this for "hard data"? So far, 107 of 497 S&P 500 companies have reported aggregate sales and earnings growth of 4.4% and 13.2% respectively.

read more

Premium insight

McCullough [Uncensored]: When People Say ‘Everyone is Bullish, That’s Bulls@#t’

“You wonder why the performance of the hedge fund indices is so horrendous,” says Hedgeye CEO Keith McCullough, “they’re all doing the same thing, after the market moves. You shouldn’t be paid for that.”

read more

SECTOR SPOTLIGHT Replay | Healthcare Analyst Tom Tobin Today at 2:30PM ET

Tune in to this edition of Sector Spotlight with Healthcare analyst Tom Tobin and Healthcare Policy analyst Emily Evans.

read more

Ouchy!! Wall Street Consensus Hit By Epic Short Squeeze

In the latest example of what not to do with your portfolio, we have Wall Street consensus positioning...

read more

Cartoon of the Day: Bulls Leading the People

Investors rejoiced as centrist Emmanuel Macron edged out far-right Marine Le Pen in France's election day voting. European equities were up as much as 4.7% on the news.

read more

McCullough: ‘This Crazy Stat Drives Stock Market Bears Nuts’

If you’re short the stock market today, and your boss asks why is the Nasdaq at an all-time high, here’s the only honest answer: So far, Nasdaq company earnings are up 46% year-over-year.

read more

Who's Right? The Stock Market or the Bond Market?

"As I see it, bonds look like they have further to fall, while stocks look tenuous at these levels," writes Peter Atwater, founder of Financial Insyghts.

read more

Poll of the Day: If You Could Have Lunch with One Fed Chair...

What do you think? Cast your vote. Let us know.

read more

Are Millennials Actually Lazy, Narcissists? An Interview with Neil Howe (Part 2)

An interview with Neil Howe on why Boomers and Xers get it all wrong.

read more