Using subscriber feedback as a measurement tool, I think that it surprised some people that I was covering and buying things in the first hour of trading. It shouldn’t have.
The immediate term TRADE line of support for the SP500 that I issued prior to the market open was 1020. As we approached that line, I started covering shorts. No, I didn’t go hog wild on the long side. I simply covered 5 short positions. That’s risk management.
I bought 1 long position, but that was not a US Equity Asset Allocation. I used market weakness to buy back our longstanding bullish view on both Australian economic policy leadership and Australian fundamental economic resilience (EWA).
Back to the USA, the most important part about covering shorts rather than buying longs is respecting this market’s newly established immediate term TRADE line of resistance. That’s the red line in the chart below at 1040. All rallies to that line are to be sold unless, of course, it is overcome.
Keith R. McCullough
Chief Executive Officer