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POSITION: Long Utilities (XLU)

This is the 3rd Short Covering Opportunity note I have written in the last 2 months (August 8th and September 12th were the other two).

I mention these time stamps not to take a victory lap, but to reiterate the confidence we have in our risk management process. It’s not always right. But it’s right a lot more than it’s wrong – and it’s repeatable.

Across durations, here are the lines that matter now: 

  1. TREND resistance = 1237
  2. TRADE resistance = 1137
  3. TRADE support = 1079 

I’ve covered our short position in the Consumer Staples ETF (XLP) and have bought back the only Sector ETF we like (Utilities – XLU), moving our asset allocation in the Hedgeye Asset Allocation Model back up to 6% from 0%.


Keith R. McCullough
Chief Executive Officer

Short Covering Opportunity: SP500 Levels, Refreshed  - SPX