Broken: SP500 Levels, Refreshed

Takeaway: For the 1st time since November 2012, the SP500 is bearish on both our TRADE and TREND durations.

POSITION: 5 LONGS, 6 SHORTS @Hedgeye

 

We’ve always thought this was about price, volume, and velocity. If #RatesRising were to break out at an accelerating rate, the rest of the market’s interconnected risk was going to start to shake. That’s happening now. And the SP500’s TREND line is broken.

 

The other big thing banging around in my head is did US Consumption #GrowthAccelerating peak sequentially in Q213? It’s been a heck of a run from the Q312 consumption lows. Anything can happen; especially if people lose enough money in bonds.

 

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

 

  1. Intermediate-term TREND resistance = 1591
  2. Immediate-term TRADE support = 1566
  3. Long-term TAIL support = 1503

 

In other words, for the 1st time since November 2012, the SP500 is bearish on both our TRADE and TREND durations, and there’s no obvious intermediate-term support to 1503. That 1566 line is a loose one.

 

As always, we’ll remain market signal and data dependent (the signal generally front-runs the data).

KM

 

Keith R. McCullough
Chief Executive Officer

 

Broken: SP500 Levels, Refreshed - SPX