After multiple breakouts above historical highs, SPX is hitting its upper trend line resistance. While the run might continue from here, this resistance creates uncertainty and the index might take a breather or stall altogether. I would keep long positions with strict stop losses and hedge any upcoming correction in the following manner:
1. Buy volatility (VXX) which has been very muted and at low levels but would shoot up if equity indices corrected; 2. Buy Gold which has been lifeless, to hedge against any cracks in the equity up-trend. In particular, gold miners such as GG.
Take a look at upcoming, follow-on ideas on VXX and GG.
Comment
⋅
Volatility flat to up in an up market continues to signal divergence, which will have to be resolved one way or another - up or down. Confirming long fundamental underlying positioning with long exposure to volatility and gold for hedging.
Comment
⋅
Like clockwork, the index bounces off its resistance and comes back down, Watching previous gap low of 2,884.69 as intraday support. Trading and closing below that level today would suggest further downside.