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Takeaway: In other words, your new Risk Range is 1 of 2: 1364-1398 (if TAIL holds) or 1335-1364 (if TAIL breaks).

POSITIONS: Long Utilities (XLU)

As we broke-out above my long-term TAIL line of 1364 this morning:

  1. 1st two moves were to cover shorts (we only have 4 left)
  2. 2nd move is to wait and watch.

Because A) 1380 = an intraday price, not a closing price and B) closing prices need to confirm for consecutive days.

Fortuitously, we don’t have any index shorts on right now (covered 10 short positions last week), so what I’ll do now is wait for the fire to breathe here and give us higher prices. If it doesn’t, I know what to do then as well.

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 resistance = 1398
  3. Long-term TAIL support = 1364

In other words, your new Risk Range is 1 of 2:

  1. 1 (if TAIL holds)
  2. 1 (if TAIL breaks)

That doesn’t make this easy. It just outlines my decision making tree. Risk managing based on conditional probabilities supports this process, however dynamically prices change.


Keith R. McCullough
Chief Executive Officer

1364, Now What: SP500 Levels, Refreshed... - SPX