POSITION: Long Consumer Discretionary (XLY)
So 3 days and 65 points (5%) lower in the SP500 what do you do? What I’ve done is easy to figure out. Time Stamps.
The key to being able to move to a net long position today is being Duration Agnostic. Yes, the long-term TAIL (1267) broke yesterday. But, the intermediate-term TREND (1213) is holding steady today. Provided that 1 holds, there’s no reason why this market can’t rally right back up to its refreshed immediate-term TRADE line of resistance (1248).
There are three different durations in that statement – TRADE, TREND, and TAIL. In managing the risk associated with beta, that’s how we roll:
- TAIL resistance = 1267
- TREND support = 1213
- TRADE resistance = 1248
There was a day when 20 to 190 handle moves in the SP500 (in 19 trading days) was unfathomable. Today, as we beg for more Big Government Intervention, all we get for that is A) shorter economic cycles and B) amplified market volatilities.
Keith R. McCullough
Chief Executive Officer