• HEDGEYE’S MARKET BRIEF
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Nasty day out there, and whenever we get oversold like this, this is exactly how it should feel…

Right here and now, my buying the SP500 on the 715 line looks like it was 1% too early, but I am rarely accused of moving “too late” - closing prices are what matters here, and anything south of 708 is a 3 standard deviation move on the immediate term duration model that I am using. Unless something catastrophic happens overnight (oil wouldn’t be trading down like this if there was a terrorist attack in the works), there is a very high probability that we see a meaningful bear market bounce in the coming hours of trading.

Below I have outlined the line that I think we can bounce too first – 757 (dotted red). That would be +7% from the 705 we are currently trading at. That’s plenty enough for me to be buying SPY here.

Let me be clear - oversold immediate term bear market bottoms should be rented, not owned.

Keith R. McCullough
CEO & Chief Investment Officer