“Never had getting down been more mandatory.”
- Ed Viesturs
Did you summit #Quad4, from the short side yesterday? Well done.
Back to the Global Macro Grind…
I’ve been using the highest altitude mountaineering metaphor to help explain how to risk manage this #Quad4 Avalanche in both the US Equity and Credit markets. Thanks to Marty Kollmorgen, who runs Serenity Alts out of Colorado, for inspiring me.
While I coach “fading your feelings” while investing, I love players who play with passion and pride.
On The Macro Show yesterday I sounded off on Jay Powell. Some people loved it. Others didn’t. I’m totally cool with both. As the one and only Michael Jordan taught me during the pandemic, “if you don’t want to play that way… don’t play that way.”
What I was trying to coach was the immediate-term risk of the particular moment in both cycle and market time.
When Coach cancels vacay with his wife (I was scheduled to be in the Bahamas this week) and starts laying into you like that in a pre-game speech, it’s up to you to #PayAttention (or not).
What you did before yesterday’s US stock (and High Yield Credit) market crash was up to you.
And every single investment and risk management decision you make today is up to you. This isn’t about the Coach. It’s about you, the player, and how you execute while playing at the highest level of The Game.
We good? Good. Let’s go. Here’s how I am setup:
A) MFO (Mucker Family Office) Long Only Accounts = 85% Cash with 50% of my invested capital in USD
B) KM Long/Short Book = -9.4% net SHORT
That’s as of yesterday’s close. Pre-open I was:
A) MFO = 79% Cash
B) Long/Short Book = -4.1% net SHORT
In other words, on the open I, A) raised cash by selling things like Utilities (XLU) which broke bad to Bearish @Hedgeye TREND (expanded Signal list attached) and B) sold LONGS and pressed SHORTs. By the close, those turned out to be profitable decisions.
What did you do? Where were you coming into the day? And what did you do intraday?
Only you can answer those questions. You’re obviously the only one who can hold yourself to account on your decision-making #process. And, like all pros who play anything at the highest level, I highly recommend that you “review your own tape.”
When Jonesy Buds and I owned part of the Arizona Coyotes that was one of my first takeaways from watching the pros. The first thing they’d do after a game is watch their own tape.
They didn’t waste their precious life-and-NHL-career-time watching everyone else’s tape. They deliberately studied their own (the team provides everyone with video of their individual shifts right after the game). The best players learn from their mistakes.
Coming into yesterday, what mistakes did you make?
I made plenty. But I did not die. The aforementioned quote from Viesturs followed him finally conquering and summiting his nemesis, Annapurna. “This was one of the happiest days of my life, and one of the hardest days of my life.” (pg 285)
Yesterday was not one of the happiest days of my life. You can ask Jonesy (who has played with me since 1995). Sometimes when we win, I get moody. I was in a foul mood after watching Jay Powell lie to the American people about “NO SIGNS” of slowing.
I’m still pissed off at Powell about that this morning.
But it won’t affect my game. I have a job to do this morning in leading both my family and firm. I like to think of myself as one of the leaders of #HedgeyeNation too. To the many leaders we have out there, I challenge you to do the same this morning.
Lead by doing. If you’re the kind of player that needs to get loud sometimes, be that guy. If you’re the player who can quietly and surgically help us smoke the competition, be that gal. It takes everyone being themselves to summit, as a team, at the highest level.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets:
UST 30yr Yield 3.14-3.53% (bullish)
UST 10yr Yield 3.03-3.58% (bullish)
UST 2yr Yield 2.82-3.58% (bullish)
High Yield (HYG) 71.91-76.85 (bearish)
SPX 3 (bearish)
NASDAQ 10,213-11,704 (bearish)
RUT 1 (bearish)
Tech (XLK) 118-134 (bearish)
Energy Exploration & Production (PXE) 29.36-37.54 (bullish)
Shanghai Comp 3190-3334 (bullish)
Nikkei 25,801-27,194 (bearish)
DAX 12,704-13,878 (bearish)
VIX 26.84-37.01 (bullish)
USD 102.02-105.99 (bullish)
EUR/USD 1.032-1.063 (bearish)
USD/YEN 130.98-136.27 (bullish)
GBP/USD 1.195-1.246 (bearish)
CAD/USD 0.763-0.788 (bearish)
Oil (WTI) 114.17-123.98 (bullish)
Nat Gas 7.01-8.52 (bullish)
Gold 1 (bullish)
Copper 4.01-4.32 (bearish)
MSFT 233-262 (bearish)
AAPL 125-141 (bearish)
AMZN 94-114 (bearish)
META 150-177 (bearish)
GOOGL 2044-2239 (bearish)
NFLX 158-195 (bearish)
TSLA 619-733 (bearish)
Bitcoin 18,004-26,789 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
