POSITIONS: Long Utilities (XLU), Shorting Industrials (XLI) and SPY
A market that doesn’t go down and has no volume is impressive, until it isn’t. It’s April the 3rdand US Equity volumes are running down between -6-17%, daily, versus my YTD composite average. We have only had 1 down day greater than -0.7%.
Maybe that is the new normal. Maybe Growth Slowing won’t matter this time either. But right around this time in 2008, 2010, and 2011, that was a really bad risk management assumption to make.
The most important lines across durations in my model are now:
- Immediate-term TRADE overbought = 1424
- Immediate-term TRADE support = 1407
- Intermediate-term TREND support = 1324
In other words, impressive should remain impressive, provided that 1407 holds. If it doesn’t, both economic gravity and 1324 are in play.
I have 13 LONGS and 14 SHORTS in the Hedgeye Portfolio.
Keith R. McCullough
Chief Executive Officer