SP500 Levels Into The Close

01/07/09 03:45PM EST
A lot of people expressed difficulty in agreeing with my view that we could very well see a -4% pullback in this tape. That’s probably why we are correcting.

After refreshing our model, here’s how the math flushes out. Be patient – this is turning into a very predictable and trade-able range. Volatility is shooting up today, like we thought it would from those oversold immediate term lows. Next line of resistance for the VIX is $45.83, but as we climb towards that line and see the SP500 fall into the buy zone, this tape sets up very bullishly. For the SP500 my levels are:

BUY “Trend” = 895-901 (see chart)
SELL “Trade” = 951

Keith R. McCullough
CEO & Chief Investment Officer

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