Bearish TREND: SP500 Levels, Refreshed

Takeaway: Our top Hedgeye Global Macro Theme for Q4 of #EarningsSlowing continues to play out at an accelerating rate.

This note was originally published October 26, 2012 at 11:09 in Macro

POSITIONS: Long Utilities (XLU), Short Industrials (XLI)

 

Our top Hedgeye Global Macro Theme for Q4 of #EarningsSlowing continues to play out at an accelerating rate. Half way through Earnings Season, we see no reason to back off that fundamental research view.

 

From a quantitative perspective (different from the research view), the bearish TREND signal remains. Across our core risk management durations, here are the lines that matter to me most:

 

  1. Intermediate-term TREND resistance = 1419
  2. Immediate-term TRADE support = 1391
  3. Long-term TAIL support = 1354

 

In other words, now that the SP500 is slicing through its April 2012 highs (and there’s no Fed put), long-term TAIL support is back in play.

 

On growth, 1/3 of this morning’s GDP print came from a Government Spending (contributing +0.71% out of nowhere, after 8 consecutive quarters of declines!). That’s going to matter as the legacy media figures it out.

 

KM

 

Keith R. McCullough
Chief Executive Officer

 

Bearish TREND: SP500 Levels, Refreshed - SPX


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