Bullish: SP500 Levels, Refreshed

Takeaway: The immediate-term TRADE overbought signal we issued last week didn’t last long.

POSITION: 11 LONGS, 8 SHORTS @Hedgeye

The immediate-term TRADE overbought signal we issued last week didn’t last long, but the down -0.5% move we had the day after was the biggest down move in 10 days. We call these bear scraps within a very Bullish Formation.

Intraday Thursday was actually the 1st time I was net short (in #RealTimeAlerts) since November 29th, so I think the call got  some attention. But so should have my covering shorts and getting back to net long on Friday morning.

That Consumer Confidence reading (+10% m/m in May vs April was that good, and all support lines for SPY held).

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

  1. Immediate-term TRADE overbought = 1678
  2. Immediate-term TRADE support = 1647
  3. Intermediate-term TREND support = 1558

In other words, I listen to my wife and my machine (in that order). Overbought was as overbought did (for a day), as it will again (higher) and oversold will lower.

KM

Keith R. McCullough
Chief Executive Officer

Bullish: SP500 Levels, Refreshed - SPX