POSITION: Long Utilities (XLU), Short Industrials (XLI)
The beauty of bounces, particularly Bear Bounces, is that you get to re-short your shorts and sell some longs. When I was on CNBC yesterday (210PM EST), the SP500 was at 1137. Now, 23 hours later, it’s 34 points (+3%) higher. That’s a big move.
Across our risk management durations, here are the 3 lines that matter to me right now:
- 1265 = long-term TAIL resistance
- 1174 = immediate-term TRADE resistance
- 1138 = immediate-term TRADE support
In terms of S&P positions, I only had longs going into yesterday’s close. That’s the best I can do to express what was a Short Covering Opportunity. This morning, I sold our Healthcare (XLV) long and re-shorted Industrials (XLI) as 1174 was not violated on the upside.
I started the day with 14 LONGS and 6 SHORTS. Now I have 12 LONGS and 8 SHORTS.
Managing your risk around proactively predictable ranges remains critical.
Let the market tell you what to do,
Keith R. McCullough
Chief Executive Officer