POSITIONS: Short Industrials (XLI) and Energy (XLE)
Plenty of people keep fighting us on this (and I personally really like to fight), so that means our fundamental research call for #GrowthSlowing is not yet consensus. Quantitatively speaking, managing the risk of the immediate-term range isn’t as easy a call to make.
Across all 3 of our core risk management durations, here are the lines that matter to me most:
- Intermediate-term TREND resistance = 1365
- Immediate-term TRADE resistance = 1348
- Immediate-term TRADE support = 1329
In other words, what was immediate-term TRADE support (1348) is now resistance, and we have ourselves a fight.
But the real fight remains between those who thought growth was fine in March/April and those bulls who are still long that same thesis as they see entirely different revenue results. Fighting reality versus expectations is always tough.
Lower-highs since April, keep the bulls on defense and the bears wondering why they aren’t shorter on days when the short side pays.
Keep managing the risk of this bearish intermediate-term range,
Keith R. McCullough
Chief Executive Officer