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POSITION: No position SPY

I sold all of my US Equity exposure in the Hedgeye Asset Allocation Model when I sold our Healthcare (XLV) position into opening market strength. With 7 of 9 S&P Sectors bearish TRADE and TREND, the read-through to the overall market’s risk is crystal clear.

Across my 3 core durations, here are the lines that matter: 

  1. TAIL (bearish) = 1377 resistance (remains the level we have used since Q1 when we were most bearish on US Growth)
  2. TREND (bearish) = 1319 resistance (was support) and is now asserting itself with confirming volume and volatility studies
  3. TRADE (bearish) = 1275 is immediate-term TRADE oversold, but the new range draws down now to 1 

This morning’s ISM number amplifies the point I have been trying to make for the last few days – what US Equities are selling off on are Growth and Earnings Expectations, not a debt default.


Keith R. McCullough
Chief Executive Officer

Breakdown: SP500 Levels, Refreshed - SPX