As prices fall and volume/volatility spikes, we are tightening the durations in our models. Managing risk in down tapes is what we specialize in. I love days like this.
As of 1030AM EST time, here are our refreshed risk management lines for the SP500:
- Overhead resistance remains material at the TRADE line of 1192; use that as a stop sign for your shorts
- Immediate term support (oversold line) = 1160
- Intermediate term TREND support = 1144
The gravitational suck of the math in our model suggests that there is a heightening probability that we take a good hard look at 1144, but that doesn’t mean we are going there today. The slingshot bounce off of 1160 could easily drive a +2.7% move to 1192 and nothing will have changed.
The reality of the math remains. The SP500 is broken from a TRADE perspective and holding TREND line support.
It’s time to fade fear, from a price.
Keith R. McCullough
Chief Executive Officer