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Today has been another low-volume price rally that has not overcome any lines that matter in our macro model. Interestingly, the SP500 has been flat or down in 11 of the last 15 days, and we’ve seen this movie of a one-off price UP, volume DOWN day before.

On August 2nd, the SP500 gapped up like this and closed up +2.2% on the day on a very bearish volume study (volume didn’t confirm price). After that, the SP500 toyed with my short selling fears, but ultimately dropped 54 points (-5.2%) from that uninspiring early August Monday to its Friday the 13th of August closing low.

This is a market that pays players who take a macro view and stick with it in order to productively trade either their gross or net exposure. For me, that view remains decidedly bearish. I shorted the SPY at my immediate term TRADE line of resistance this afternoon (1099) as I see no immediate term downside support to 1063 (see chart).

If you are legitimately bearish here, you have to be able to short them when they are green.


Keith R. McCullough
Chief Executive Officer

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