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I said my piece this morning in the Early Look (“Good Guys” at www. Hedgeye.com) on what I think about Bank of America’s hypocritical downgrade, but that doesn’t change the reality that managing risk around GS is simply a mathematical exercise augmented by an understanding of market sentiment.

If you’d like the opposite investment process of mine for a view, here’s the qualitative view on GS from one of America’s perma-bulls:

“I don’t think there’s any evidence that they would lose enough business that you would notice it… it’s much more of a political problem and a reputational problem that I believe will pass.” (Bill Miller, Chairman and CIO of Legg Mason)

The intermediate term TREND line of resistance that we signaled on 4/16 remains intact up at $165.11, and today GS is breaking down through an important immediate term TRADE line of support at $156.98. Next line of significant support = $143.96.

Don’t make analyzing this situation personal. It’s just math.


Keith R. McCullough
Chief Executive Officer

GS: Risk Management Update - GS