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POSITION: Long Healthcare (XLV), Short SPY

I’m not naked short this market. Maybe I should be. I am getting a ton of questions about “year-end rally.” That means that idea might be a liability to expectations now. As long as we keep making lower-highs and this market’s TAIL remains broken, I’ll be fading beta.

Across our risk management durations, here are the lines that matter most: 

  1. TAIL resistance = 1270
  2. TRADE resistance = 1260
  3. TRADE support = 1233 

Meanwhile the EUR/USD pair, which has the highest factor weighting in my Global Macro model to Correlation Risk, is setting up for another rally in the USD and selloff in the Euro into and/or on the EU Summit catalyst.

It’s all interconnected, until it isn’t. Stay tuned.

KM

Keith R. McCullough
Chief Executive Officer

Bearish TAIL: SP500 Levels, Refreshed - SPX