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It’s about lunch time but this Thunder Bay Bear has had enough to eat on the short side for this week. Below the 1080 line in the SP500 is the immediate term TRADE bear trap that we call 3 standard deviations oversold (on a short term duration).

I covered our short position in the US Consumer Discretionary (XLY) this morning, not because I’m not bearish on consumer spending – that jobless claims # was a bomb (biggest weekly jump in rolling claims for 2010) – I covered because the XLY, like the SP500, is immediate term oversold.

Oversold is as oversold does, so we’ll see if I’m right with my refreshed immediate term risk management range for the SP500 (1080 to 1097). I think you can manage your gross/net exposures around this range for now. The Bear Market Macro TREND line of resistance remains overhead at 1144.

KM

Keith R. McCullough
Chief Executive Officer

Bear Market Macro: SP500 Levels, Refreshed...  - 1