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Takeaway: The market is doing precisely what it should here – confuse people.

This note was originally published November 02, 2012 at 12:54 in Macro

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

The market is doing precisely what it should here – confuse people.

Don’t forget that the market has really only had 1 up day in the last 8, so there’s still plenty of anxiety post The Bernanke Top (SEP14) and a ratty October (Tech -6.3%). We’ve recaptured the TREND (1419) line, but failed at the TRADE (1432) line – so there’s plenty of risk to consider into the Election.

Across our core risk management durations, here are the lines that matter to me most:

  1. Immediate-term TRADE resistance = 1432
  2. Intermediate-term TREND support = 1419
  3. Immediate-term TRADE support = 1392

In other words, the immediate-term Risk Range is now 1392-1432 (a little tighter day over day, which is bullish) and the trigger line for beta  remains 1419.


Strong Dollar (down Gold, Commodity Bubbles, etc.) continues to price in that the media’s political “experts” (polls) may have the Election wrong. Only time will tell. In the meantime, we’ll let the market tell us what to do next.


Keith R. McCullough
Chief Executive Officer

Still Dicey: SP500 Levels, Refreshed - SPX