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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: 

  1. TAIL = 1266
  2. TREND = 1235
  3. 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

Bullish TRADE: SP500 Levels, Refreshed - SPX