Bounce: SP500 Levels, Refreshed

POSITION: Long Healthcare (XLV)

 

I didn’t think we’d bounce this high, this fast. Good thing I’m not short SPY and/or any S&P Sector ETF. Now we can re-populate our short book.

 

What would stop me from selling in this 1194-1203 range? Time and price.

 

The SP500 would need to close above and hold 1203 (TREND resistance) through Friday’s US Unemployment Report. On top of this morning’s miss on monthly New Home Sales (307,000 versus 313,000 expected), there’s a good chance that the high-frequency US economic reports this week also miss (Consumer Confidence tomorrow, PMI Wednesday, ISM Thursday, etc).

 

Across our core 3 risk management durations, the SP500 remains in a Bearish Formation (bearish TRADE, TREND, and TAIL): 

  1. TAIL = 1270
  2. TREND = 1203
  3. TRADE = 1233 

Immediate-term TRADE oversold (support) is now 1170. Below that, no support to 1139.

 

Take your time selling. Today’s close will be a more important signal than this morning’s open.

KM

 

Keith R. McCullough
Chief Executive Officer

 

Bounce: SP500 Levels, Refreshed - SPX