POSITION: No Position SPY
Both the TRADE and TREND lines for the SP500 are currently broken. That’s not good.
Across durations, here’s the SP500 setup (it’s a Bearish Formation – bearish TRADE, TREND, and TAIL):
- TAIL = 1377
- TREND = 1319
- TRADE = 1301
At the same time, the VIX has broken out into what we call a Bullish Formation (bullish TRADE, TREND, and TAIL):
- TRADE = 18.98
- TREND = 17.59
- TAIL = 19.39
So what do you do with that? I usually start with what you don’t do – don’t start playing the “valuation” game. Valuation isn’t a catalyst in a Bearish Formation. In many cases, it sucks you in early. Being early can be painful.
In the immediate-term, I have a loose TRADE line of support for the SP500 at 1291 and a VIX level of resistance of 22.93. Stay hedged.
Keith R. McCullough
Chief Executive Officer