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POSITION: Short SPY

My position on the long-term TAIL being broken is, at a bare minimum, consistent.

So is my process. I run a core 3-factor model to measure the range of risk – PRICE, VOLUME, and VOLATILITY. Friday’s VOLUME was -27% below my immediate-term TRADE duration average. That, combined with a Bullish Formation in VOLATILITY, is bearish for US Equities, from this price.

Across durations, here are the lines that matter most right now: 

  1. TAIL = 1269 (resistance)
  2. TRADE = 1253 (support)
  3. TREND = 1227 (support) 

In other words, watch 1253 today/tomorrow very closely. We think the inflation data (US PPI and CPI) will come in higher than expected (Tuesday/Wednesday). That should keep Bernanke in a box, and upward pressure on the US Dollar.

KM

Keith R. McCullough
Chief Executive Officer

Bearish TAIL: SP500 Levels, Refreshed - SPX