“Paper has more patience than people.”
-Anne Frank
She wasn’t referring to paper-trading. She was talking about the tremendous value in keeping a deliberate, self-effacing, journal.
To kick off your New Year, here’s a great passage from Anne Frank from The Stillness Is The Key: “How noble and good everyone could be if, at the end of the day, they were to review their own behavior and weigh up the rights and wrongs…
“They would automatically try to do better at the start of each new day, and after a while, would accomplish a great deal” (pg 53). What’s your daily journaling #process? It’s Game One of 2023. Every day we can all #GetBetter.
Back to the Global Macro Grind…
“Keep a notebook. Travel with it. Eat with it. Sleep with it.”
-Jack London
Welcome to the first US trading day of 2023. Your notebook review and daily journaling of what’s changed (in rate of change terms) shouldn’t change today. The process shouldn’t change when the color of the screen does either.
We had a great 2022. Stay still (you earned it). Your Top Asset Allocation should be #patience.
As always, let’s start with The Setup in the Global Currency market:
- US Dollar Index sucked Chart Monkeys into shorting it last week (it was -0.8%, but held Bullish TREND support)
- Don’t be a Chart Monkey in 2023.
- EUR/USD getting hammered for a -1.2% loss to start 2023 and remains Bearish TREND @Hedgeye
- Japanese Yen was up another +1.4% vs. USD last week after breaking out to Bullish TREND @Hedgeye post BOJ move
- GBP/USD getting pounded for a -1.0% loss this morning after doing nothing at +0.2% for the last month
- Argentina’s Peso continues to crash, down another -1.8% vs. USD last week, crashing -17.6% in the last 3 months
If chasing 50 and 200-day Moving Monkey Charts worked, I’d chase them.
Btw, I love monkeys. But the Global Currency doesn’t love what’s happening in big places like Argentina and Russia (Russia’s Ruble was down another -7.0% last week vs. USD, crashing -19.1% in the last 3 months).
If all you see when you look at USD is what the BOJ (Bank of Japan) did, we want to play against you. Post the US Dollar being one of the Top Asset Allocations of 2022 at +8.2%, it’s still signaling Bullish TREND against almost everything ex-Yen!
That’s what happens in a Global #Quad4 Recession. You know what also happens:
A) Global Demand Slows at a faster rate … and
B) Demand for another Major Currency called Gold #GoesUp
Instead of being the Chart Monkeys that chased QQQ, TSLA, etc. long in MAR, APR, and AUG of 2022, we shorted every single one of those lower-highs and will do so again this morning as both Gold and Silver make HIGHER-HIGHS:
A) Gold is up another +1.1% this morning after being up +1.2% last week to +3.8% in the last month
B) Silver (SLV) and Platinum (PPLT) are up again this morning after Platinum’s big +4.9% week
And this is partly why I genuinely like monkeys. In addition to entertaining my 4 kids at many of the world’s zoos, Old Wall Chart Monkeys will be chasing all our Precious Metals Asset Allocations at the TOP-ends of our Risk Ranges to kick-off 2023!
*Power User of The Process Note: today is when you sell-SOME of those Asset Allocations.
I’ll review that major Asset Allocation decision that we made back in November on our Q1 2023 Macro Themes Presentation on Thursday, January 5th. Macro Pro subscribers can watch that in real-time. At this time last year we called for a stock market crash.
Instead of having a “Santa Claus Rally”, most things that crashed in 2022, kept crashing in December too:
- NASDAQ was down -8.7% in the last month
- Russell 2000 was down -6.6% in the last month
- Bitcoin was down -3.1% in the last month
I’ll be more than happy to re-load on the short side of those things on green. I have no idea how many more times the uniquely American FOMO chart-chasing crowd is going to keep chasing those at lower-bear-market-highs, but God bless them!
Both Short and Long-term US Treasuries (and Sovereign Bonds) did the Crasher & Slasher sleigh-wreck thing into year-end too. We were not long of any of those last week. We will not chase their rally on the open of Game One of 2023 this morning either.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 30yr Yield 3.56-4.08% (bullish)
UST 10yr Yield 3.50-3.95% (bullish)
UST 2yr Yield 4.19-4.42% (bullish)
High Yield (HYG) 72.50-74.44 (bearish)
SPX 3 (bearish)
NASDAQ 10,208-10,743 (bearish)
RUT 1 (bearish)
Tech (XLK) 120-127 (bearish)
Consumer Staples (XLP) 73.68-75.88 (bullish)
Healthcare (XLV) 134-138 (bullish)
Utilities (XLU) 69.24-72.12 (bullish)
DAX 13,807-14,305 (bearish)
VIX 20.18-25.04 (bullish)
USD 103.11-106.80 (bullish)
EUR/USD 1.033-1.070 (bearish)
USD/YEN 129.70-136.40 (bearish)
GBP/USD 1.188-1.218 (bearish)
Oil (WTI) 74.19-81.37 (bearish)
Nat Gas 3.92-5.72 (bearish)
Gold 1 (bullish)
Silver 23.12-24.92 (bullish)
TSLA 101-141 (bearish)
Bitcoin 16,255-17,081 (bearish)
Best of luck out there in 2023,
KM
Keith R. McCullough
Chief Executive Officer
