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We made two short sales on strength in the Hedgeye Virtual Portfolio this morning: Copper (JJC) and Citigroup (C).

While there was a fleeting hope that the US stock market could have a snappy bear market bounce this morning (the unemployment report wasn’t awful relative to expectations), the math in our quantitative models continues to say sell on strength.

In the chart below we outline how ugly this market is starting to look across all 3 of our core investment durations (TRADE, TREND, and TAIL). We call this a Bearish Formation (when all three durations confirm the same direction of price momentum, volume, and volatility).

Despite the SP500 having closed down for 4 consecutive days and for 8 out of the last 9, lower-lows of support continue to register in our models. This is bearish and speaks to the reality that consensus on US and global economic growth is not yet Bearish Enough.

Our next line of immediate term TRADE support is now 1005.


Keith R. McCullough
Chief Executive Officer

Bear Market Macro: SP500 Levels, Refreshed... - S P