The intermediate term bear market in US Equities is as bear market does – this morning’s “bounce” can’t be inspiring the bulls.
As is usually the case, the reflexive nature of the US stock market perpetuates the direction of price momentum. Across all 3 of our core Hedgeye Risk Management durations (TRADE, TREND, and TAIL), the SP500 remains broken.
- TREND resistance = 1144
- TAIL resistance = 1091
- TRADE resistance = 1080
Confirming this bearish quantitative view are bearish fundamental economic data points. This morning we had 3 that were glaringly bearish in our macro model:
- MBA Mortgage Applications down another -3.3% wk/wk, bringing June to date down to the 172 level (lowest monthly levels since 1997)
- ADP’s June Employment report came in way light (13k versus 57k in May)
- II’s Bullish to Bearish Survey had no change in the bulls wk/wk and Bears only climbed to 33% from 31% last wk
Bearish Enough, this market isn’t yet…
That’s probably why our quantitative studies are revealing another lower-low of support (1029) as of 11AM EST.
Keith R. McCullough
Chief Executive Officer