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Yesterday’s +1.8% meltup in the SP500 was one of the more frustrating for the short selling community. It came on bone dry volumes, into both month and quarter end.

It’s always easier to make sales when things are green, and that’s what we have been doing all day in the Virtual Portfolio (2 long sales, 3 short sales). Volumes in this market are flailing up here as we test making YTD highs. At this stage of the game, that’s plenty reason enough for me to start unloading of illiquid longs. Being long illiquidity up here on the high-wire is not the risk management move of choice for me.

Into tomorrow, the range of probabilities in the SP500 is relatively right. I have immediate term TRADE support at 1045 and immediate term resistance at 1077 (see chart below). Manage risk around that range and be patient. Month and quarter end will be behind us soon enough.

KM

Keith R. McCullough
Chief Executive Officer

Flailing Volumes: SP500 Levels, Refreshed... - a1