This note was originally published November 01, 2012 at 11:34 in Macro
POSITIONS: Long Utilities (XLU), Short Industrials (XLI)
What worked yesterday (and for the last month and a half) isn’t working today. TRADE or TREND?
I don’t know. All I know is that tomorrow is a big political storytelling day with a made-up government number slapped on top of it as we head into the home stretch of this epic Obama/Romney election. I have no idea who is going to win that either.
What I do know is that, across our core risk management durations, here are the lines that matter to me most:
- Immediate-term TRADE resistance = 1431
- Intermediate-term TREND support = 1419
- Immediate-term TRADE support = 1388
In other words, 1388-1431 is your refreshed Risk Range (on our immediate-term TRADE duration) and 1419 is proving to be a pretty good trigger line for beta (which evidently moves both ways).
A close above 1419 would be bullish; a close below it bearish. After the next 2 market closes, we’ll let the market tell us which way to lean.
For now, the easiest thing to do is take down gross exposure. Rolling the dice is not part of the process.
Keith R. McCullough
Chief Executive Officer