POSITION: Short Financials (XLF), Long Utilities (XLU)
No matter where we go this morning, here we are – right back to the fundamentals. After another very low-volume rally into month-end markups, consensus is being forced to re-calibrate their expectations once again this morning.
I think the quote I used earlier this week from Dan Gardner’s book (“Future Babble – Why Expert Predictions Fail and Why We Believe Them Anyway”) sums up where we are right here and now quite concisely: “feeling good about a judgment is a prerequisite to acting on it.”
If Global Growth Slowing, tanking US Consumer Confidence, and no jobs isn’t making you feel less good this week than you may have at higher prices, then you really are contrarian!
As a reminder, the US stock market is in what we call a Bearish Formation (bearish TRADE, TREND, and TAIL):
- TAIL = 1263
- TREND = 1292
- TRADE = 1234
That’s not good.
What is good, however, is that I am registering a higher-low of immediate-term TRADE support than I could have flagged for all of August. I’m at 1146 support now (I used to be in the 1086-1108 range), so this is progress.
And as we all now, progress is important. Repeating prior policy mistakes in this country is not the answer.
Keith R. McCullough
Chief Executive Officer