We're getting a lot of questions today as to why we won't ride this perceived to be Bull into the land of perpetuity. The answer is basically because we don't think it's a Bull. We don't think it's a Bear yet either. We think it's a Bull Shark that we don't want to mess with, and we are very price sensitive.
For the past three months we have ostensibly picked up a few of the professional Bull riding fan base, but that wasn't our intention. To be clear, we were making the REFLATION call that Squeezy The Shark was going to expedite a short squeeze of generational proportions.
After a +40% trough-to-peak move, I'm establishing an intermediate term target that's only 5% higher than yesterday's close (at the 989 in the chart below), this is hardly the time to be pleading for me to be as bulled up about Squeezy as I was... been there, done that.
As the US Dollar broke down through the $80 line into the end of December, I got sucked into overstaying my welcome long US equities into mid-January. I have no need to replay that mistake all over again. January was a month where I was wrong, and I don't want to repeat the mistake of buying an overbought tape like that again here in June for the sake of pandering to a stale thesis.
Everything has a time and a price. I have an immediate term TRADE line of SP500 resistance that's formidable at the 955 line (dotted red) and if I see that print, I'll only see another 3.5% upside left from there. With the only support line of resistance all the way down at 910 (dotted) green, for now the best decision I can make is to do nothing and wait. Both the US currency and US Treasury market are in crisis - that will have unintended consequences.
Being in a YTD position to sit on performance and wait is reserved for those who didn't miss the last 3 months of performance. Chasing bulls is not what I do.
Keith R. McCullough
Chief Executive Officer