“I will spend the rest of my days trying to be worthy of your sacrifice.”
-Tim Kennedy
If you thought getting up at 4:35 AM in the Bahamas (after hanging out with my brother and Jonesy) was tough, you’re soft. Try living anything remotely close to the life of sacrifice that Tim Kennedy tells us about in Scars and Stripes.
Back to the Global Macro Grind…
Welcome to another Macro Monday @Hedgeye where a Global #Quad4 Recession is being reiterated by Global Macro Markets after sucking plenty back in.
As a matter of discipline, let’s start with what the Global Currency market was signaling last week:
- US Dollar Index was up another +0.6% last week to a Macro League Leading +13.7% YTD = Global #Quad4
- EUR/USD was down another -1.00% for the Home team as Europe enters its #Quad4 Recession
- Yen was down -0.5% vs. US last week and remains in #Quad4 Crash mode at -16.4% YTD
- GBP/USD was down another -0.7% last week and remains Bearish on both our TRADE and TREND durations
- Hungary’s Forint was down another -2.4% vs. USD last week, crashing -11.4% in the last 3 months
And you thought being amongst the 50% of Americans who don’t have $500 to their name was bad? Try having your hard-earned wealth and income priced in Hungarian currency.
Depending on what you need to buy in order to live (some people just have to buy Meme Stocks), last week had plenty of things on sale, including certain (but not all) Commodities:
A) Oil (WTI) saw #Quad4 Disinflation (in demand) down another -2.9% last week, crashing -24% from Cycle Peak
B) Copper had a bear market bounce of +0.7% last week to -13.5% in the last 3 months
C) Lumber and Nickel have crashed -26.5% and -20.8% in the last 3-months of their Full Investing Cycle
And, if you shorted Dr. Copper (or Dr. KOSPI), like a boss at lower-highs last week, #WellDone. Those two sick puppies are down another -3.4% and -2.2%, respectively, this morning = Global #Quad4 Recession, reiterated.
In both US and Global Equity Signal Strength terms, it was a nasty Global #Quad4 week:
- NASDAQ got nuked for a -4.4% weekly loss, taking its #Quad4 Crash to -24.4% from its Cycle Peak
- US Tech (XLK) and Consumer Discretionary (XLY) bulls got body bagged for -5.6% an -4.7% weekly losses
- Germany’s DAX was down another -4.3% as Europe enters a nasty #Quad4 Recession
Nasty is as nasty NASDAQ does. Consensus remains net LONG of it in non-commercial CFTC Futures & Options terms, don’t forget. All the while, with naughty narratives about “bearish positioning”, here’s reality:
A) Consensus Net SHORTs in US Equity Volatility (VIX) went to -106,345 net short contracts last week … prior to
B) A +24% week-over-week ramp in the VIX off the low-end of my Risk Range!
Tell the “bullish charts” and CTA guys to A/B Test that during the next 4 QUARTERS of #Quad4.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets:
UST 30yr Yield 3.06-3.35% (bullish)
UST 10yr Yield 2.76-3.17% (neutral)
UST 2yr Yield 3.19-3.50% (bullish)
High Yield (HYG) 75.07-78.31 (bearish)
SPX 4006-4205 (bearish)
NASDAQ 11,921-12,731 (bearish)
RUT 1 (bearish)
Tech (XLK) 136-148 (bearish)
Utilities (XLU) 74.70-78.41 (bullish)
DAX 12,604-13,517 (bearish)
VIX 20.98-27.13 (bullish)
USD 106.03-109.91 (bullish)
EUR/USD 0.985-1.013 (bearish)
USD/YEN 133.18-138.93 (bullish)
GBP/USD 1.163-1.201 (bearish)
Oil (WTI) 85.90-96.30 (bearish)
Copper 3.52-3.74 (bearish)
Bitcoin 19,138-23,660 (bearish)
Best of luck out there this week,
KM
Keith R. McCullough
Chief Executive Officer
