Editor's Note: This research note was originally sent to subscribers on May 13, 2014 at 10:04 a.m. EST by Hedgeye CEO Keith McCullough. Follow Keith on Twitter @KeithMcCullough.
POSITION: 8 LONGS, 7 SHORTS
But whatever you do, don’t call falling bond yields (do not sell bonds here!) on today’s #ConsumerSlowing (Retail Sales +0.1%) print a US growth slowing confirmation. The weather turned, but the consumption data that matters most didn’t.
Across our core risk management durations, here are the lines that matter to me most:
- Immediate-term TRADE overbought = 1901
- Immediate-term TRADE support = 1866
- Intermediate-term TREND support = 1845
In other words, you have -1.8% and -2.9% immediate (TRADE) and intermediate-term (TREND) risk to the downside if you get plugged chasing the all-time SPY high here. So don’t do that.
Both the Russell2000 and UST 10yr yields remain bearish, because growth is slowing.
Keith R. McCullough
Chief Executive Officer