This note was originally published June 06, 2013 at 13:23 in Macro
POSITION: 12 LONGS, 5 SHORTS @Hedgeye
It didn’t take people long to get really bearish again, because consensus has been bearish for the last 6 months. Once again, the market is immediate-term TRADE oversold within a bullish intermediate-term TREND.
As both the consumption data (ISM Services PMI, New Orders, Housing, etc) and employment data (jobless claims 347,000) surprise to the bullish side, who would have thought that #GrowthAccelerating would become the latest fear? At least with Cyprus things were actually burning.
Across our core risk management durations, here are the lines that matter to me most:
- Immediate-term TRADE resistance 1624, then 1673
- Immediate-term TRADE oversold < 1601
- Intermediate-term TREND support = 1577
In other words, we snapped one of my front-runner lines (immediate-term TRADE support of 1624) and the machines chased. This isn’t new. Neither is front-month vitality (VIX) pinning another 6-month lower-high.
This is what happens when hedge fund performance is bad and consensus is forced to cover high and short low.
Keith R. McCullough
Chief Executive Officer