Lower-Highs: SP500 Levels, Refreshed

POSITIONS: Long Bonds (FLAT), Long US Dollar (USD); Short Industrials (XLI) and Utilities (XLU)

At the beginning for the year, the bull case was growth “is back” – then, as growth slowed, it was earnings (“stocks are cheap”, using the wrong numbers). And earnings slowed. Now the bull case is government.

Great.

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 = 1406
3. Long-term TAIL support = 1364

In other words, the Risk Range across durations is widening as the expectation for more government catalysts are heightening.

Waiting on Obama to speak,

KM

Keith R. McCullough
Chief Executive Officer