POSITIONS: Long Utilities (XLU), Short Consumer Discretionary (XLY)
I Time-Stamp everything we do because I believe in transparency and accountability. Time-Stamping doesn’t mean we are always right. It simply means we don’t have to tell stories about nailing everything.
At 11:02AM EST on Friday my note said “Selling Green” at 1374 in the SP500. That was my immediate-term TRADE line of resistance then and it remains so now. Across all of my core risk management durations, here are the lines that currently matter most:
- Immediate-term TRADE overbought = 1374
- Immediate-term TRADE support = 1363
- Intermediate-term TREND support = 1290
In other words, what was immediate-term TRADE resistance is now support at 1363 – and if that support fails to hold, there’s no legitimate support to the intermediate-term TREND line of 1290.
Interestingly, but no surprisingly, going back to when we started the firm (2008) we have never NOT corrected to my intermediate-term TREND line after seeing an intermediate-term TREND top. Neither have we NOT seen VIX 15 being an explicit signal to sell US Equities.
Notwithstanding Growth Slowing could easily see US GDP Growth cut in ½ (Q4 to Q1), our risk management process has not changed.
Keith R. McCullough
Chief Executive Officer