Short Selling Opportunity: SP500 Levels, Refreshed

POSITION: Short SPY

 

Evidently I am really bad at getting the super-secret whisper on the next central plan to ban free-market pricing. That makes me wrong today. I sold my long position in Healthcare (XLV) this morning and will wait and watch to short SPY again.

 

If you look at either the YTD chart of the SP500 (attached) or the 3-day chart, you’re going to come to one conclusion – the US stock market continues to make a series of lower-long-term highs. 

  1. The long-term TAIL line of 1270 resistance is the big one that matters heading into DEC; today’s rally increases the probability of a down DEC
  2. The immediate-term TRADE line of 1238 makes most beta chasing securities immediate-term TRADE overbought today
  3. The intermediate-term TREND line of resistance I’d been using (1203) is now support 

Net, net, net – barring another central plan tomorrow morning (anything is possible) – this 3-day rally from 1158 to 1238 looks a lot like the one we saw on that “coordinated easing” of September 2008. Remember that?

 

I do. Short Covering was intense, but that only perpetuated the crash that ensued thereafter.

 

Big Government intervention A) shortens economic cycles and B) amplifies price volatility.

 

KM

 

Keith R. McCullough
Chief Executive Officer

 

Short Selling Opportunity: SP500 Levels, Refreshed - SPX


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