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POSITION: Short Consumer Staples (XLP)

No change in my view here as there is no factor in my model that is making me change, yet.

Across risk management durations, the SP500 remains in what we call a Bearish Formation (bearish TRADE, TREND, and TAIL): 

  1. TAIL = 1266
  2. TREND = 1237
  3. TRADE = 1182 

There is an even shorter-term duration I use (almost hyper short-term to stress test for crash scenarios) that is building in a lower-high of resistance now at 1157. This is not encouraging as it puts pressure on the downward bound of my immediate-term TRADE range (1113).

At 1113 or wherever we wash out next, I’ll likely call that a Short Covering Opportunity. Nothing more. Don’t forget the US Employment Report is due out on Friday and a 50,000 payroll add (expected number) is no layup. Neither is closure on a Euro-TARP bazooka before October 17th (EU Summit).


Keith R. McCullough
Chief Executive Officer

Bearish Formation: SP500 Levels, Refreshed - SPX