POSITIONS: Long Utilities (XLU), Short Industrials (XLI) and Energy (XLE)
This morning’s pre 4AM futures weakness was more reflective of fundamental realities (#GrowthSlowing and Earnings Expectations at risk) than the post 5AM Spanish Bailout pop was.
I’m saying that because the market just did. It’s also important to contextualize this turn from red to green to red again within the framework of the intermediate-term TREND (bearish).
Across risk management durations, here are the risk management lines that matter to me most:
- Intermediate-term TREND resistance = 1365
- Immediate-term TRADE resistance = 1359
- Immediate-term TRADE support = 1330
In other words, provided that top line growth and bottom line earnings expectations continue to be a market liability, I think 1330 is in play – and fast.
#BailoutBull can only take this no-volume rally so much further.
Keith R. McCullough
Chief Executive Officer