Stressed? SP500 Levels, Refreshed...

04/20/09 12:47PM EDT

I am getting an inordinate amount of feedback in my system today, which leads me to assume that people are somewhat stressed by today's down move. Don't be.

Breaking down through my 1st line of support at SPX 846 (dotted red line) puts the downside support range of 815-819 in play. That range (shaded green) is a powerfully bullish intermediate TREND line of support and it should be respected.

After continuing to make lower lows last week, the Volatility Index (VIX) is finally spiking +16% here today. The VIX  could easily run to 40.67 (up another +5%) and remain broken from both a TREND and a TRADE perspective. All that considered, combined with a US Dollar that's strong on the day (which is DEFLATIONARY), leads me to believe that I can be patient here and wait on buying/covering anything that I sold last week.

No stress. From the 840 line in the SPX, you're looking at another -2.5% of downside to manage risk through. If the SPX breaks down and closes below 815, and you're really levered up long, my best advice would be to pray.

Keith R. McCullough
Chief Executive Officer

Stressed? SP500 Levels, Refreshed...  - chsp

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