Sell Some: SP500 Levels, Refreshed

Takeaway: Every time this US stock market corrects we get a whole new bear case and each bear case is different than the one prior.

This note was originally published June 10, 2013 at 11:02 in Macro

POSITIONS: 6 LONGS, 5 SHORTS @Hedgeye

 

Sell Some: SP500 Levels, Refreshed - bullbear

 

Ok, I sold more than some. I actually sold ½ my long positions this morning. But not because I am all beared up or anything like that – it’s just process. We bought the oversold signal well last week < 1601, and now the SP500 is 50 handles higher!

 

I usually don’t use exclamation marks but, this year deserves one. Every time this US stock market corrects we get a whole new bear case. Each bear case is different than the one prior, but it feels equally as tough to buck up and buyem when you should.

 

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

 

  1. Immediate-term TRADE overbought = 1662
  2. Immediate-term TRADE support = 1624
  3. Intermediate-term TREND support = 1583

 

In other words, now we’re just trying to manage the risk of the intermediate-term TREND range (1582-1662). If you want to think about where I’d be as a % of a full intermediate-term TREND position in US Stocks, I went to 97% of my max allocation last week.

 

If we test 1583 again this summer, I’ll probably do that again.

 

Keep moving out there,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Sell Some: SP500 Levels, Refreshed - SPX


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