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Takeaway: On the way down to 1515-11529 support, I can then cover shorts and start to take up my gross long position again.

POSITION: 9 LONGS, 8 SHORTS @Hedgeye

On our immediate-term TRADE duration, the SP500 just failed at TRADE resistance (1557) again. On our intermediate-term TREND duration, the market still looks fine (1515 TREND support). A market that’s in this position has what we call Duration Mismatch.

What to do? For me the answer had to be learned over the years – but now the playbook is pretty simple: A) take down gross exposure and B) make sure my net is tight. On the way down to 1 support, I can then cover shorts and start to take up my gross long position again.

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

  1. Immediate-term TRADE resistance = 1557
  2. Immediate-term TRADE support = 1529
  3. Intermediate-term TREND support = 1515

Being bullish at every minute of every day is no way to live. Neither is disrespecting my signal. So I’ll let that bearish immediate-term TRADE signal override what’s becoming an even more bullish intermediate-term TREND research view (Dollar Up, Down Oil).

KM

Keith R. McCullough
Chief Executive Officer

Bearish TRADE: SP500 Levels, Refreshed - SPX