Process: SP500 Levels, Refreshed

POSITION: Long Healthcare (XLV), Long Consumer Discretionary (XLY)

Our call yesterday was to buy the SP500 if it held our immediate-term TRADE support (1232). Our call was also to sell it if it failed at our immediate-term TRADE line of resistance (1249). We did both.

Don’t fight us – it’s just the process of managing the risk implied in our range (I explained that in more detail in this morning’s Early Look).

While the long-term TAIL (1270) of resistance for the SP500 insulates managing the broader 1 range of risk, our process attempts to get in there and make a call on the shorter-term durations. I realize that’s not for everyone. But it’s what we do well. So we’ll do more of it.

As a reminder, across all 3 of our risk management durations, here are the key lines we’re focused on: 

  1. TAIL = 1270
  2. TRADE resistance = 1249
  3. TRADE support = 1232 

Manage your gross and net exposures around these ranges instead of being forced to chase beta.

KM

Keith R. McCullough
Chief Executive Officer

Process: SP500 Levels, Refreshed - SPX