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Not Good: SP500 Levels, Refreshed

Takeaway: This correction is not like the ones we bought (we shorted this one).

POSITION: 6 LONGS, 8 SHORTS @Hedgeye

I don’t always go net short, but when I do, I prefer Down Dollar and #GrowthSlowing.

 

This morning’s ISM Services report was the 1st of the major leading indicators (SEP #) in our model confirming what both the bond and currency markets continue to confirm – on the margin (from YTD growth accelerating highs in JUL-AUG), US growth is slowing.

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

  1. Immediate-term TRADE resistance = 1704
  2. Immediate-term TRADE support = 1671
  3. Intermediate-term TREND support = 1660

In other words, this correction is not like the ones we bought (we shorted this one). With Bernanke banning economic gravity on the long end of the curve and the USD getting crushed, you shouldn’t have expected me to execute any other way.

It’s just our process.

KM

Keith R. McCullough
Chief Executive Officer

Not Good: SP500 Levels, Refreshed - SPX