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Takeaway: If the USD and rates fail here, this market has plenty of downside risks.

This note was originally published November 01, 2013 at 11:56 in Macro

POSITION: 8 LONGS, 6 SHORTS @Hedgeye

I’m buying Gold and Treasuries for the first time in a year (today) as the S&P 500 signals lower-highs and the VIX signals higher-lows. If the USD and rates fail here, this market has plenty of downside risks.

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

  1. Immediate-term TRADE resistance = 1771
  2. Immediate-term TRADE support = 1744
  3. Intermediate-term TREND support = 1683

In other words, with the all-time closing high (1771) registering as resistance, there’s plenty of mean reversion downside. If the market stops me out of these thoughts, so be it. But sentiment (II Bull/Bear Spread) is tracking at its year-to-date high now too.

KM

Keith McCullough

Chief Executive Officer

Toppy? SP500 Levels, Refreshed - km1