What I should have done was cover my SPY short position on Thursday’s market open down at 1176. Should have, a bag of pretzels, and something cold will render me just about useful enough for the world horse-shoe throwing championships down at Pass Lake.
Now the math is new and so are my updated immediate term TRADE ranges for the SP500. We’ll be immediate term overbought again at higher prices than those who are still in this Pain Trade may be able to bear. There is no resistance until 1202, which is obviously 2 points above a big round number that the monkeys are staring at.
Monkey-see, monkey-do, and we know that plenty a monkey can make money on the long-side of a market. So don’t be the horse-shoe that these monkeys are flinging or you’ll end up looking silly like I do right now being short. Wait for your spot.
Once this low volume Pain Trade rids itself of all its passengers, the move lower will be sharp and swift. Volatility (VIX) hasn’t been this low since May of 2008 and that’s an ominous sign in and of itself, particularly if you consider Greece the Bear Stearns of this market with the real show being a Spanish Lehman over the intermediate term.
Key support lines under 1184 is the intermediate term TREND line down at 1128 (-6.1% lower from 1202 if that’s where you get your next SP500 short off). Don’t disrespect the similarities that this current 2-month rally has to the one that ended, abruptly, on January 19th. Just when you can’t take it anymore, the music stops.
Keith R. McCullough
Chief Executive Officer