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POSITION: Long Consumer Discretionary (XLY)

If you need proof that US Employment and US Consumption enjoy a Strong Dollar, ask an American.

If you need proof that the US stock market is making lower-highs, just pull up a chart. The SP500 is making lower-highs on 2 of 3 risk management durations (TAIL and TRADE).

The question from this time and price is whether we break-out back above TRADE resistance (1231) or break-down below TREND (1207) support?

Across all 3 risk management durations (TRADE, TREND, and TAIL) here are the lines that matter most: 

  1. TAIL resistance = 1269
  2. TRADE resistance = 1231
  3. TREND support = 1207 

On any rally toward 1231 that fails, I’ll be considering re-shorting the SPY because being long Consumption here can only take this market to another lower-high as long as the Financials and Basic Materials/Energy stocks continue lower.

KM

Keith R. McCullough
Chief Executive Officer

Lower-Highs: SP500 Levels, Refreshed - SPX