“That’s all I really am about is trying to win football games.”
- Bill Belichick
That’s a great quote from a great chapter of The Dynasty titled “Getting Belichick.”
Who knew that post that press conference in January of 2000, introducing him as the new Head Coach of the New England Patriots, that Belichick would stay true to his process, not matter what the adversity, for 23 years, and win 6 Super Bowls?
A lot of people don’t like Bill Belichick. A lot of people don’t like me. You have to win, consistently, at the highest level to be hated. Some people hate that I’ve never been on the wrong side of a bear market in 23 years. I’d hate for that to change.
Back to the Global Macro Grind…
While it’s a little sad to have to remind our profession of the history of Hedgeye’s bull and bear market calls (CNBC and Blomberg won’t, ha!), performance matters more than anything on Wall Street. And we’re just doing our job.
Wouldn’t it be nice if everyone else you paid did?
To me, The Job is defined as follows:
- Don’t lose money
- Compound returns on that pile of money
That’s why I didn’t call it Hedgeye Moon, Momo, or FOMO. I called it Hedgeye Risk Management for a reason. All I’m really all about is helping you, your family, and/or your firm to preserve and protect your hard earned capital.
So, as Coach Belichick likes to say, we’re on to the next game. And I think the bulls are trapped.
Here’s what the Fractal Pattern of a Bull Trap looks like in a US Equity Bear Market:
A) Screens are green. CNBC is bullish.
B) Indices and widely held stocks are at the top-end of their Risk Range™ Signals
C) Bearish @Hedgeye TREND Signal resistance levels are overhead
Yes, it just so happens that this bear market (post the bear market bounce, the NASDAQ is still -19.9% from its all-time #BubbleCap #Quad2 peak of NOV 2021) is signaling FOUR straight #Quad4s too (hasn’t happened since 2000-2001)…
But, just to get to what’s in my notebook/playbook, here are those Fractal Bearish @Hedgeye TREND Signal Levels:
- Junk Bonds (JNK) = 99.16
- High Yield (HYG) = 80.40
- Euro (FXE) = 102.62
- Financials (XLF) = 37.11
- Russell 2000 = 2071
- Gerbs Storytelling (GK) = 23.03
- JP Morgan (JPM) = 135
- US Retail (XRT) = 79.88
- NASDAQ = 13,877
- Airlines (JETS) = 22.03
So, you’re a JETS fan… and you’re saying there’s a chance…
Here are some basic things you should note from my notes:
A) Every one of those 10 things were green on the screen yesterday, so I shorted SOME of every one of them
B) They were all approaching the top-end of my Risk Range™ Signals
C) They are all signaling Bearish @Hedgeye TREND
You’ll also note that those are the Top 10 Positions (in terms of size) in my Long/Short book.
You might note that some of my best shorts of 2022 aren’t currently in my Top 10. You’ll also note that Bill Belichick cut and/or traded plenty of prior performers… and that he brought some of them back!
But why? My primary receiver (Josh Edelman Steiner) and I outlined why in yesterday’s 154 slide Mid Quarter Update call.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets:
UST 30yr Yield 2.92-3.11% (neutral)
UST 10yr Yield 2.58-2.94% (bearish)
UST 2yr Yield 2.87-3.40% (bullish)
High Yield (HYG) 75.95-78.86 (bearish)
SPX 3 (bearish)
NASDAQ 11,906-12,970 (bearish)
RUT 1 (bearish)
Tech (XLK) 136-149 (bearish)
Utilities (XLU) 71.20-75.98 (bullish)
Healthcare (PINK) 25.23-26.10 (bullish)
Shanghai Comp 3148-3289 (bearish)
DAX 13,148-13,771 (bearish)
VIX 19.42-24.91 (bullish)
USD 104.91-107.67 (bullish)
EUR/USD 1.012-1.033 (bearish)
Oil (WTI) 86.01-98.02 (bearish)
Nat Gas 7.51-8.56 (bullish)
Gold 1 (bullish)
Copper 3.34-3.69 (bearish)
META 154-179 (bearish)
Bitcoin 21,057-24,702 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
