POSITIONS: Long Utilities (XLU), Long Consumer Discretionary (XLY)
Yesterday I wrote a note titled “Bearish TREND.” Today its Bullish TRADE – 2 different durations, 2 different risk management views. Less and less people I talk to can afford not to be Duration Agnostic.
Here are the lines that matter:
- TAIL = 1266
- TREND = 1235
- TRADE = 1194
So this morning’s test of 1194 holding (on very ratty pre-market news) is bullish in the immediate-term. And if that’s too immediate-term for some, I guess that’s too bad. With the VIX having a 3-handle, volatility requires us to tighten up our durations and risk management callouts.
Another bullish rotational factor I see today is the US Dollar holding its bid as US Equities rally. Strong Dollar = Strong America. If we Deflate The Inflation, the biggest factor in US GDP growth (consumption) can recover.
That’s why I bought Consumer Discretionary (XLY) this morning when it was red. Our analysts like TGT, EAT, and MAR as ways to play this theme.
Keith R. McCullough
Chief Executive Officer