POSITION: 5 LONGS, 4 SHORTS @Hedgeye
This is not good. Both PRICE and VOLATILITY are now confirming yesterday’s VOLUME signal. In my 3-factor model, that’s all I need to stay out of the way. If the TREND line of 1589 remains broken, there is not intermediate-term support to 1503.
Many of you will ask why I am using 1589 now (instead of 1583). That’s the right question. And the answer is that I’ve had to tweak my implied volatility assumption for a breakout in intermediate-term US Equity (front-month) volatility above my 18.98 VIX TREND line.
Across our core risk management durations, here are the levels that matter to me most:
- Immediate-term TRADE resistance = 1629
- Intermediate-term TREND resistance = 1589
- Long-term TAIL support = 1503
In other words, for a few weeks I have been saying ‘get out of the way’ – and for the 1st time this year I am saying stay out of the way (for now). That’s new for me. For 6 months you’ve been used to seeing me buy corrections. Thanks Ben.
I am price, volume, and volatility data dependent. This is my plan (for now). And the plan is that the plan is always changing.
Enjoy your weekend,
Keith R. McCullough
Chief Executive Officer