“Never satisfied, never content, always pushing higher and higher.”
-Tim Grover
While that quote might have you thinking about SPY pushing for its 66th all-time high of 2021… Grover was writing about MJ in his #behavioral book Relentless – From Good To Great To Unstoppable:
“Michael set the standard for killer instinct and competitive drive. Each time his Chicago Bulls sealed another championship – there were 6 – he wouldn’t just hold up the number of fingers for the rings he’d already won…
He’d hold up another finger for the next championship.” (pg 19)
Back to the Global Macro Grind…
So did you buy #Quad1 on red last week?
For those of you who are new to following me, I don’t grind like this to layup, panic, or puke. In addition to my #1 goal in building Hedgeye alongside my teammates (#winning), I do this so that I can help you win too.
No, that’s doesn’t mean we’re always winning. Every loss I have is a learning opportunity. But every big win we have is the other team’s loss. The other team is called consensus.
What does losing look like (for them)? On recent Macro Shows @HedgeyeTV I’ve been reviewing the line items and features of our proprietary GIP (or Quad) Model. As you can see on slide 16 of the Macro deck:
A) There are 30 features in the model
B) Throughout a quarter that means there are 90x in a month that we can change if the data does
C) Almost all of OCT has been reported and we already have 10 of 30 data points for NOV
While the most stealth data points from the #Quad3 in Q3 Real GROWTH #slowing period were actually #accelerating on a 2-year basis in SEPTEMBER, it’s crystal clear that OCT was a big #acceleration from the aggregate AUG/SEP slowdown.
Moreover, unless you don’t do ROC (rate of change) math, or you’re just lying to people to suit your bearish #GrowthSlowing narrative, the NOV data has #accelerated vs. the OCT #acceleration:
- Auto Sales going from DOWN -25% in SEP to DOWN -20% in OCT to DOWN -17% in NOV = #acceleration
- Mortgage Demand #accelerated to a 9-month high
- Non-Farm Payrolls continued to improve alongside US Jobless Claims at CYCLE LOWs
- Aggregate Labor Income continued to #accelerate to +9.1% in NOV
- ISM #accelerated in NOV vs. OCT to 61.1
- ISM Services #accelerated to an ALL-TIME HIGH of 69.1
*Each of the 30 features back-tests as statistically significant with respect to predicting the ROC (rate of change) of Real GDP GROWTH and each feature’s contribution to the overall signal is dynamically retrained each quarter according to the relative strength of its 1st difference regression with the dependent variable.
Therefore, unless you have the wrong #VASP (Volatility Adjusted Signaling Process) and you thought last week’s #Quad4 market moves were NOT episodic and were the beginning of a new @Hedgeye TREND, you definitely were NOT data driven.
Again, that’s the best thing about The ROC (rate of change): the data doesn’t lie – people do.
And how about that episodic-and-non-TRENDING Vol Spike in US Equities (VIX) from last week? Was that the 9th time out of 10 since 2012 where you bought the damn dip with the VIX > 30 and got paid to not panic?
#Yep. Your life time is precious and your Cycle Time is relatively short. Next time you see a TRIPLE DIGIT implied volatility PREMIUM on SPY (vs. 30-day realized) and the US economy is #accelerating, you know what to do.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets:
UST 10yr Yield 1.31-1.69% (bullish)
UST 2yr Yield 0.47-0.69% (bullish)
SPX 4 (bullish)
NASDAQ 15,002-16,091 (bullish)
RUT 2150-2353 (bullish)
Tech (XLK) 164.23-171.92 (bullish)
Consumer Discretionary (XLY) 198-213 (bullish)
VIX 15.28-31.01 (bearish)
USD 95.49-96.83 (bullish)
Nat Gas 3.45-4.83 (bearish)
Gold 1 (bearish)
Bitcoin 48,112-61,967 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
