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POSITION: SP500 (SPY) no position; long Volatility (VXX)

It’s quiet out there today so all of the price, volume, and volatility scores in my model mean less than they would on an ordinary Monday. That said, market prices don’t lie; people do – and the risk in analyzing today is prefacing all analysis with my own yeah buts.

For the last few weeks, I’ve been looking for 2 explicit price levels in the SP500 and VIX, respectively, to signal that we are entering the danger zone of heightened probability of an immediate term crash. That’s not to say a crash is likely. It’s simply to say that it’s likelier than it was last Monday.

Those 2 risk management levels are: 

  1. SP500 > 1164
  2. VIX at/below 20 

As of 1PM EST today, the VIX is trading below 20 and the SP500 is testing 1167 on the upside. While the most anti-climactic of all scenarios would be if today was the lower-high for the SP500 (versus it’s April high – see chart), I don’t foresee that being the case. I’m registering 1174 now in terms of immediate term TRADE upside, and as hard as it is to wait and watch, that’s what I am going to do.  Shorting the SP500 in the face of QE and M&A requires patience.


Keith R. McCullough
Chief Executive Officer

Bear/Bull Battle: SP500 Levels, Refreshed...  - S P