Technical Comment SP500 // Update of September 11th post

Stop buy order at 2140 has been executed yesterday . A profit of 2% has been booked on this Short initiated on August 24th at 2185.

US equities initiated a big bounce caused by Fed Governor Lael Brainard in which she said that « it would be wise for the Fed to keep monetary policy loose » … just the contrary of what one of his Fed colleague stated last friday . These recent permanent contradictory statements by Fed members has caused volatility to increase in the last days . The Vix index oscillated between 12 and 21 in the last 3 sessions versus a 12-14 range for july and august . When VIX goes UP equities markets go DOWN …

Despite yesterday gains there are little reason for bullishness and i remain at best neutral at this point (SP500 at 2159).

Action :  Given several factors that were already discussed (Risk on rates , relative high valuations, politics ,.. ) to which recent increased volatility and negative seasonality effect can be added, i am more confortable with equities portfolio being hedged at 50% minimum.   

Should SP500 cross the 2100 level ( blue uptrend line) down i would advise to initiate new shorts / increase hedges with initial targets in the 2000 area. Levels : <2080 in session & <2100 closing basis .





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