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Takeaway: There have been some fantastic selling opportunities in 2014. This looks like one of them.

I’m on the road today seeing investors in NYC and I am trying to explain what just happened in the last month in the most simple terms I can. “So” here’s the summary:

  1. Consensus chased the all-time #bubble high in SEP to > 2011 SPX
  2. Then freaked out and sold low (130-150 handles lower) last week
  3. And is now chasing a no-volume bounce to lower-highs, saying last week was the “bottom”

I for one have a harder time getting from its “it’s not a bubble”, to the fetal position, to “we’ve bottomed” (in 3 weeks) but that’s just me!

In terms of levels, here are the lines that matter to me most:

  1. Intermediate-term TREND resistance = 1967
  2. Immediate-term TRADE resistance = 1943
  3. Immediate-term TRADE support = 1830

Oh, and that’s with an immediate-term risk range for the VIX of 15-29! In other words, if the SPX were to drop over 100 points, in a day (from here), I’d consider that within the band of probable outcomes at Hedgeye.

There have been some fantastic selling opportunities in 2014. This looks like one of them.

KM

Keith R. McCullough
Chief Executive Officer

Selling Opportunity: SP500 Levels, Refreshed  - SPX