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POSITION: Short SPY

In the Hedgeye Portfolio, I shorted the SP500 on Tuesday at 3:14PM at 1297. We maintain that short position as 1297 remains immediate-term TRADE resistance. Across durations, within the framework of our TRADE/TREND/TAIL Risk Management Process, here’s the setup:

  1. TRADE resistance = 1297
  2. TREND resistance = 1320
  3. TAIL resistance = 1377

That’s what we call a Bearish Formation – when all 3 of our core risk management durations are bearish.

Is consensus Bearish Enough on growth yet? I’m not sure – but consensus may be too bullish on earnings expectations. Micron and Oracle certainly didn’t bode well for Tech earnings today – and I don’t think the Financials are baking upside surprises to the 1st week of earnings season in mid-July either. At least not yet.

All that said, I’m not a blind bear. Short-and-hold isn’t what I do. So I just tightened up my net exposure in the Hedgeye Portfolio (LONGS minus SHORTS) back to neutral (10 LONGS, 10 SHORTS) from net short on today’s US market open.

Enjoy your weekend,

KM

Keith R. McCullough
Chief Executive Officer

Bearish: SP500 Levels, Refreshed - 1