POSITION: Short the SP500 (SPY)
Apple earnings are going to fly the Nasdaq to the moon and everyone is going to buy everyone (oh, and we need QE3 until bonus season because this is all really deflationary). It’s just another day in the risk management life as the US stock market scales the heights of dangerous October price levels.
We’re short the SP500 (SPY) as of last Wednesday right around this price. Our refreshed immediate term TRADE line of resistance is now 1185 and there’s plenty of resistance all the way up to the YTD highs established in April, when APPL’s Q1 earnings took the stock to pre-September highs.
There’s -1.4% of immediate term downside risk to the TRADE line of 1169. If that line were to break, there’s no support until 1144. Assuming a 40 point drop or (-3.5%) gets people’s attention, we’ll plan on it as a probable event as we head toward nasty US Housing data that will be reported next week.
Keith R. McCullough
Chief Executive Officer