POSITION: No Position SPY
To be, or not to be bearish – remains the question.
Clearly, with Growth Slowing As Reported Inflation Remains Sticky, Global Equity markets are putting a lower-multiple on The Stagflation; particularly US style Jobless Stagflation – and this morning’s y/y rise in US Import Prices is simply just another reminder of that.
In the chart below we show lower-lows of immediate-term TRADE support (1257), and no long-term support all the way down to 1219 (our long-term TAIL of support), which would be a -10.6% drawdown from the April YTD high (1363).
While some are hoping that the 200-day moving average saves this selloff from moving to 7 consecutive weeks, we’d remind Risk Managers that hope is not a risk management process.
I remain very optimistic about the future of America – particularly as this failure of Keynesian common sense gives way to changes in leadership and economic resolve.
Keith R. McCullough
Chief Executive Officer