Tough Spot: SP500 Levels, Refreshed

POSITIONS: Long Utilities (XLU), Short Industrials (XLI), Basic Materials (XLB), and SPY

Any time I’m short and the market is remotely against me, I get questions. Right now, I’m getting the most questions I’ve ever had. With Growth Slowing and the US Dollar in free fall again (down 6 of the last 7 weeks), that makes sense. This is a tough spot.

The other big short-term reasons why this is a tough spot are: 

  1. Month-end markups – that can last until midday on Monday when the fun cops start watching (last day of April)
  2. iQe4 expectations – at this point, I really have no idea what the next product upgrade looks like, or if it’s coming
  3. Immediate-term TRADE resistance is higher at 1409 

In other words, we can easily take the elevator up, every hour, on no volume, up to 1409 and make lower-highs. And then take the windows, again, on the way down.

Tough spot. Such is life for those of us who still expect to win and lose.

KM

Keith R. McCullough
Chief Executive Officer

Tough Spot: SP500 Levels, Refreshed - SPX