Position: longer, for now.
Maybe now I’ll pretend I am bullish, beg for QE3, and then sell into it.
In all seriousness, the last 48 hours have definitely tested the this market’s immediate term TRADE pain thresholds. I outlined these levels in this morning’s Early Look, but they are worth revisiting - anything sub 1053 would be 2.5 standard deviations oversold on our most immediate term risk management duration (TRADE, which is 3-weeks or less) and 1040 would be a 3 standard deviation event, which rarely occurs.
Fundamentally, we are chaos theorists. Therefore today’s intraday low of 1041 being a point away from the line we’d consider max-immediate-term-pain isn’t entirely surprising. We’ll call today’s action proactively predictable.
My immediate term support and resistance lines for the SP500 are now 1046 and 1074, respectively. Manage risk with a bearish bias around that range.
Keith R. McCullough
Chief Executive Officer