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POSITION: no position

Yesterday’s head-fake was more important than the one we observed on October 31st (primarily because both VOLUME and VOLATILITY signals at 1275 were more bearish than they were at 1285).

As a reminder, my core risk management model has 3-factors – PRICE, VOLUME, and VOLATILITY.

With VOLUME signaling down -25% and down -13% moves on Monday (1261) and Tuesday (1275), respectively (versus the average VOLUME day in my immediate-term TRADE duration), today’s ramp in early morning volume is not good.

Neither is VOLATILITY making higher-lows as PRICE makes lower-highs on my intermediate-term TREND duration.

Here are the lines that matter from here: 

  1. TAIL resistance = 1268
  2. TRADE resistance = 1255
  3. TREND support = 1216 

If you take out the 2 hours of yesterday’s trading, this is pretty much the same risk management setup I gave you 24 hours ago. From here, I’m going to Fade Beta in this 1 range.

KM

Keith R. McCullough
Chief Executive Officer

Fade Beta: SP500 Levels, Refreshed - SPX