Right on time, against the toughest Monthly Quad Comps of Q4, the US economy is slowing at a faster pace…
- QQQ – we remain short of both HIGH BETA (Long BTAL) and GROWTH in addition to the Sector Styles that we have been short for almost 12 months (XLY, XLK, etc.). What’s incredible is the complacency embedded in futures and options right now – most of that ends today with OPEX, but look at Tech (XLK) with a -30% implied volatility DISCOUNT vs. 30-day realized! Bear markets crash from “oversold” levels…
- RATES – big #VASP signal on European Rates seeing big follow-through this morning with Italian 10yr Yield up a big +17bps (German 10yr +8bps and signaling Bullish @Hedgeye TREND alongside UKT 10s); UST 10yr still signaling a Proper #Quad4 with TREND = 3.59% and a bone-chilling -76bps on the 10s/2s spread signaling Recession
- GOLD – there’s always a bull market developing somewhere – Gold Up +0.5% with USD and Rates Up this morning is super bullish – when was the last time I wrote “super bullish” about something? (never). Gold Volatility < 15 is what gets that characterization.
Immediate-term @Hedgeye Risk Ranges: SP500 = 3; UST 10yr Yield = 3.38-3.66%
KM
