Risk Management Time: SP500 Levels, Refreshed

On accelerating volume studies, the SP500 has finally broken my immediate term TRADE line of 1126.

 

At the same time, the VIX is breaking out to the upside above both my immediate term TRADE (19.69) and intermediate term TREND (22.48) lines. It’s not time to get emotional here. It’s risk management time.

 

Part of managing risk is not blowing out your long exposure with the monkeys on today’s intraday lows. Part of it is not stepping up buying everything on every down tick of the way either. Most of it is watching and waiting.

 

I’m watching the intermediate term TREND line of support for the SP500 very closely. In the chart below, that’s the solid green line down at 1095. We need to close below that line (and hold below that line) for my intermediate term bullish view on US Equities to change. That does not mean I am bullish at every price and every duration.

 

We have a 52% Cash position in our Asset Allocation Model and only a 6% allocation to US Equities. If 1095 holds, I’ll be stepping up that US Equity exposure. In the meantime, I am going to watch, and wait.

KM

 

Keith R. McCullough
Chief Executive Officer

 

Risk Management Time: SP500 Levels, Refreshed - km22


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