POSITION: Short Financials (XLF)
I accept Uncertainty in my risk management process. Period.
The only thing that I am certain about is where my risk management lines are and that they will change as price, volume, and volatility data does.
I’ve been saying there was a heightening probability of a market drawdown on Fed “expectations” day. That’s all risk management is – understanding which way the uncertainty is tilting and considering heightened or lowered probabilities.
While it looked like the SP500 had an immediate-term shot at making a lower low of 1108 today (when it was down 2% in a straight line post Bernanke not doing QE3), it obviously looks less likely now. That could change in 3 hours. So I’ll just wait and watch.
The long-term TAIL of resistance remains at 1256. Immediate-term TRADE resistance is now 1183. And immediate-term TRADE support moves up 2 points to 1110.
In the Hedgeye Portfolio, I covered our Italy short (EWI) this morning as Europe rallied “off the lows” into the close. That makes the LONG/SHORT positioning pretty much neutral with 10 LONGS and 10 SHORTS, for now…
Keith R. McCullough
Chief Executive Officer