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Takeaway: Our immediate-term risk range says there’s a risk spread of -3.5% (1650-1592), so we’ll sell some.

POSITION: 4 LONGS, 4 SHORTS @Hedgeye

Nice rally (on no volume) after A) holding TREND support (1592) and B) breaking out above our TRADE line (1621) on more US Employment #GrowthAccelerating news (both NSA rolling Jobless Claims and Monthly Payrolls) last week.

Who said #RatesRising is bad? And for who? Where to from here? Our immediate-term risk range says there’s a risk spread of -3.5% (1), so we’ll sell some (taking net exposure from 7 LONGS, 3 SHORTS Friday to 4 by 4 here).

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

  1. Immediate-term TRADE overbought = 1650
  2. Immediate-term TRADE support = 1621
  3. Intermediate-term TREND support = 1592

In other words, this risk range is narrow and trade-able, and we’re cool with that. The SP500 is in a Bullish Formation (bullish TRADE, TREND, TAIL) and the VIX is in a Bearish Formation, so we’re trying to thread the needle here within our range – but at least we know that.

KM

Keith R. McCullough
Chief Executive Officer

Overbought: SP500 Levels, Refreshed - SPX