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POSITION: Long Utilities (XLU)

Into month end (August 30th), I wrote a note saying I was moving the Hedgeye Portfolio to net short (more SHORTS than LONGS) for the 1st time since June 23rd. I was looking for a correction of the August month-end markup.

After seeing the correction in the first 6 days of the September, I’ve now covered my Financials (XLF) and Housing (ITB) short positions and moved the Hedgeye Portfolio to one of its longest (net) positions of the year (13 LONGS, 7 SHORTS).

As the math in my process changes, I do. I’m not saying that the SP500 is bullish from an intermediate (TREND) or long-term (TAIL) perspective. I am, however, saying explicitly that the immediate-term TRADE signals here are bullish.

Here are the lines that matter: 

  1. TRADE support = 1158-1182 is the range I am highlighting in the chart (attached); those are higher-lows versus the YTD closing low (1119)
  2. TRADE resistance = 1230
  3. TAIL resistance = 1263 

So I have been covering and buying again this morning as the probability has heightened that we see 1230 in the SP500 on the next leg up. Manage your risk around the 1158-1230 range proactively.


Keith R. McCullough
Chief Executive Officer

Bullish?: SP500 Levels, Refreshed - SPX