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Pick your duration and I’ll tell you whether it’s a bull or a bear. On both our intermediate term (TREND) and long term (TAIL) durations it’s a bear. From an immediate term TRADE perspective (3 weeks or less) it’s a bull. Bears become bulls and bulls become bears – or they just go out of business.

In a debate I was in yesterday, Steve Roach reminded us what his net worth has done (Morgan Stanley stock) over the course of the last 3 years. That’s what we call a long term bear. Using our long term TAIL duration, the SP500 has obviously lost 1/3 of its value. When it comes to managing risk on any duration the long term history of price matters.

From an immediate term TRADE perspective, the SP500 will be overbought at 1131. From an intermediate term TREND perspective, the SP500 continues to trade below our Bear Market Macro line of resistance = 1144 (see chart). If the SP500 were to break its refreshed immediate term TRADE line of support of 1110, you tell me what the super duper alchemists of this business are going to do…

We’re not short the SP500 here but we will be, at a price. Bullish is as bullish does, until it doesn’t.

KM

Keith R. McCullough
Chief Executive Officer

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