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POSITION: Short Financials (XLF)

When the market’s rally is being led by Bank of America (BAC) and the Financials (XLF), that’s not a good thing. Or at least it hasn’t been since the Financials put in their Fed cycle-high in February of 2011.

Across all 3 of our core risk management durations (TRADE, TREND, and TAIL), the SP500 remains bearish/broken: 

  1. TAIL resistance = 1256
  2. TRADE resistance = 1165-1191 (using a range instead of a price point to capture wicked volatility studies)
  3. TRADE support = 1108 

Critically, nothing has changed in the last 2 days and now I am signaling a lower-low of immediate-term TRADE support (below the prior YTD closing low of 1119). If Bernanke doesn’t deliver whatever it is people are begging for on Friday, this could get very ugly, very quickly.

Bear markets bounce.


Keith R. McCullough
Chief Executive Officer

Bears Bounce: SP500 Levels, Refreshed - SPX