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:
- TAIL = 1270
- TRADE resistance = 1249
- TRADE support = 1232
Manage your gross and net exposures around these ranges instead of being forced to chase beta.
Keith R. McCullough
Chief Executive Officer