[COMPLIMENTARY] Top 3 Things | #Quad4 Scare/USD/Curve

This Global Macro market move may not be episodic-and-non-trending, so pay attention, be patient, and be flexible…

1. #QUAD4 – in the USA is when the Dollar breaks out, Bond Yields collapse, and everything Equity Beta gets crushed on a TRENDING volatility spike – and there’s plenty of that this morning alongside what’s already been a #Quad3 and #Quad4 collapse in Asia, confirmed by the recent Bearish @Hedgeye TREND breakdown in the KOSPI (and our Bearish TREND views on China and Japan)
2. USD – what’s driving this? The Fed (Bullard) saying they’ll taper into next year’s almost definite #Quad4 in Q2 of 2022 economic slow-down. Don’t forget that the USD Index has done absolutely nothing (trading in a 1% range) since the US economy started Phase Transitioning out of #Quad2 at the end of June, so a breakout > @Hedgeye TREND resistance of $93.45 would be material and Oil/Copper agree with that!
3. CURVE – the Yield Curve is doing exactly what I thought it would do ahead of the Fed meeting in Jackson Hole #compressing – late/lagging economic blather from the likes of Bullard keep the front-end of the curve pinned (2s haven’t budged at 0.21% this AM) and the market says OMG on the long-end with the Fed’s taper timeline running squarely into #Quad4 in Q2 of 2022 – still short Small Caps and Bank Stocks (KRE)

Immediate-term @Hedgeye Risk Ranges: SP500 = 4; UST 10yr Yield = 1.20-1.39%

KM