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:
- Immediate-term TRADE resistance = 1557
- Immediate-term TRADE support = 1529
- 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).
Keith R. McCullough
Chief Executive Officer