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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: 

  1. 1265 = long-term TAIL resistance
  2. 1174 = immediate-term TRADE resistance
  3. 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

Bears Bounce: SP500 Levels, Refreshed - SPX