PARTY'S OVER FOLKS.
After pumping up markets with monetary meth at record speed, high noon has come for the unelected, ivory tower-perched, elites who control our financial freedom. Saddled with record high inflation, the blind Federal Reserve has decided to ignore the economic signals of an impending recession and send markets crashing directly into the ground.
Powell left market rubble in his wake; in the first day following the Fed's May Meeting:
- The Dow dropped 1,000 points in its worst day since 2020
- The NASDAQ fell -5%, another post-Covid record drop
- Bitcoin got chomped, down -8.5%
- And losing $504 Billion in market cap since its November 8th peak #HODL
It was the worst day in markets since 2020, wiping out $5,800,000,000,000 of the S&P 500's market cap. NEARLY SIX TRILLION.
Worst day for everyone other than Hedgeye subscribers, that is.
WE PREPARED OUR SUBSCRIBERS FOR THE FED-INDUCED CRASH DOWN FROM THE GREATEST MARKET BENDER OF ALL TIME.
"The Russell 2000 in short order will be down -20% or more from its cycle peak. I think the NASDAQ's going to crash too, it won't take long."
- Hedgeye CEO Keith McCullough on the January 27, 2022 edition of The Macro Show
Hedgeye began signaling #Quad4 to our subscribers back in September of 2021, making critical pivots as we entered 2022 in January and February, and along the way.
It's when economic growth and inflation decelerate at the same time. It’s also when story-telling, narrative-driven, ‘stock pickers’ with no repeatable investing process get absolutely blown up as risk assets get smoked.
In terms even Simple Jack can understand, #QUAD4 IS WHEN $H*T BREAKS.
"The S&P 500 put up its worst start to a year in over 80 years (since 1939) and the NASDAQ, which has only been around since 1971, also put up its worst four month start to the year in the last 50+ years. So, deep #Quad4 it is here in Q2.” - Hedgeye Macro & Financials analyst Josh Steiner... days before the Cinco de Mayo carnage.
How did we position subscribers? A quick rundown of our ETF signals per our ETF Pro product since January (not to mention the daily calls and risk management coaching from our Risk-Manager-in-Chief, but we'll keep it basic):
- On January 3, 2022, Hedgeye went long the U.S. Dollar (UUP) and Gold (GLD) (woah, don't tell a story-telling growth stock-picker!) This year, the Dollar is up +7.25%, and Gold up +4%. Not too shabby considering the S&P 500 is down -13.4%. #alpha
- On February 1, 2022, Hedgeye shorted Tech (XLK), Consumer Discretionary (XLY), and Retail (XRT)... they're down -12.7%, -13.9%, and -14%, respectively. The Hedgeye Process goes both ways; shorting is key to alpha generation. And if you can't short, underweighting these sectors would've generated alpha all the same.
- On February 28, 2022, we geared up subscribers for a key #Quad4 tenet: the breakdown of credit. Hedgeye shorted High Yield (HYG) and Junk (JNK)... and they're down -6.75 and -7.1% since, respectively.
- On March 21, 2022, we added MOAR key positions to the short side because we go #bothways, shorting the NASDAQ (QQQ) and the Russell 2000 (IWM). QQQ is down -10.6% and IWM is down -9.6%, since.
#Quad4 markets crash from oversold levels. Never forget that. I'm not saying this market has to keep crashing tomorrow (from here). But I am saying it could.
The good news is we don't have to know what it's going to do. We are on the right side of this crash.
As a team, we take great pride in having helped you preserve and protect your hard earned capital during US stock market crashes since 2008." - Hedgeye CEO Keith McCullough in a Real-Time Coaching Note to subscribers going into the market close on 5/5/2022
Staring at a screen, consternating over losses while listening to your advisor or some T.V. talking head explain that 'you have a long time horizon, so don't worry about your portfolio's -20% drawdown!' is NOT how you should be spending your time.
Here at Hedgeye, we’re not about WORDS—we are about RETURNS.
If you’re looking for a better way to protect your hard-earned capital (and make money shorting asset classes that will sustain further losses), we can absolutely 100% help you.