“I squeeze like an anaconda.”
- Tito Ortiz
Tito is my age (47), but I’m thinking he could probably squeeze me pretty good. I don’t mean like +45% in AMC or +25% in Gamestop (in a day) good, but pretty damn good.
No matter what I say or do today, many Tweeters will say I’m getting squeezed by this #PeaceTrade. Yep. And all I have to say about that is it could have been a lot worse!
I’m a big fan of world peace and I am happy for whoever comes out of the Russia/Ukraine #Ceasefire (is there one btw?) with better prospects for their lives. Unfortunately, for both the USA and Europe, it’s still Deep #Quad4 in Q2.
Back to the Global Macro Grind…
With both European Bond Yields and Equities ripping towards the top-ends of their respective Risk Ranges, in hindsight many of my #VASP Signals become crystal clear.
Don’t like that? Too bad. That’s The Game. Markets are always front-running the “news” you can’t yet see.
Inasmuch as I didn’t have a line into Putin when I shorted Russia (which is up +10% on the #PeaceTrade here this morning), way back when (RSX, pre War) with the Russian economy in #Quad4, I don’t need one into Biden or the Fed on +7% US GDP growth.
That +7% headline GDP number, if you recall, was the one we went with on SEP 23rd of 2021, when MANY were positioning for continued #Quad3 Stagflation. It ended up being a big time #Quad2 in Q4 US economic #acceleration that peaked in NOV 2021.
Yep, you’ll get that “final GDP” news tomorrow (USA reports Q421 GDP). And onto the next Quad we go…
If you’re looking for more upside in the UST 10yr Yield (i.e. towards the refreshed top-end of my Risk Range at 2.55%) on tomorrow’s +7% GDP headline and an inflating PCE Deflator, the macro market is too.
I know. I didn’t know about smoking peace pipes this morning, but my Signal did know to sell TLT last Thursday on green.
What do I really know other than some people will get all hot and bothered by my making that risk managed decision inasmuch as making the decision to NOT short QQQ since my initial mistake doing so on March 17th?
Yes, it’s annoying. My #VASP signaling process, that is. Why did I cover my Tech (XLK) Short on March 23rd for a gain?
Why haven’t I re-shorted XLK yet? Again, I had no idea why. I did not care why. And I certainly don’t need to apologize for having the humility to listen to my bloody signal (instead of my research that this isn’t going to end well by the end of #Quad4 in Q2!).
Could it have been worse for me? A: way worse.
This isn’t my first bear market bounce to risk manage. I’ve been squeezed, publicly, like Moe Howard “squeezed the cider out of your adam’s apple” many times. In timestamped terms, it’s been way worse than being slapped by Will (please don’t cancel).
Did you know that Moe was one of the Three Stooges? I did. That makes me really smart.
Whether you think I am numb, dumb, or “smart” doesn't mean anything to me. What matters are my #timestamps and how I am using my signals to risk manage what I CAN’T see (like #CeaseFire).
Examples:
A) Why did my signal say SELL-some Gold (GLD) multiple times when it was overbought in March?
B) Why did my signal NOT say add to QQQ or my Gerbs (GK) shorts since March 17th?
C) Why did I only make 2 mistakes in 17 tries (closed positions) in Real-Time Alerts since March 17th?
A: my #VASP (Volatility Adjusted Signaling Process).
I know. It’s hard to believe. And it upsets some people because they probably didn’t have the same Single Stock selection and/or timing on the short side, but here’s what actually happened:
A) TNET was stopped out at a 2.04% loss (and headed directly higher post that cover)
B) TLT was sold at a -0.39% loss at $130.96 on March 24th (it barely bankrupted me)
C) TSLA short was covered (and not re-shorted b/c the Signal said not to) on March 2nd at $857
That means that throughout this entire short squeeze I did not lose money on 1 Single Stock short the whole way up. That’s what I mean by it could have been worse. Imagine I was long QQQ for the -22% crash from November 19th too?
On Core Short Positions that I have not added to since March 16-17 in Real-Time Alerts (QQQ, XLY, GK), yes those have sucked. But I won’t suck if I gross those positions back up to my MAX again before the next #Quad4 fall.
So stay tuned on that this morning. I’m looking forward to adding new European Equity Shorts (DAX, EWQ, etc.) today too.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 2.08-2.55% (bullish)
UST 2yr Yield 1.81-2.45% (bullish)
High Yield (HYG) 80.01-82.65 (bearish)
SPX 4 (bearish)
NASDAQ 13,104-14,502 (bearish)
RUT 1 (bearish)
Tech (XLK) 144-162 (bearish)
Energy (XLE) 70.07-80.16 (bullish)
Gold Miners (GDX) 36.24-39.34 (bullish)
Utilities (XLU) 69.96-73.76 (bullish)
Shanghai Comp 3120-3295 (bearish)
DAX 14,103-14,707 (bearish)
VIX 19.01-29.35 (bullish)
USD 97.90-99.30 (bullish)
Oil (WTI) 94.06-119.14 (bullish)
Gold 1 (bullish)
TSLA (bullish)
Bitcoin 38,403-47,992 (neutral)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
