“Not one of New York’s major newspapers bothered to send a reporter.”
-John Eisenberg
Nope. Eisenberg wasn’t talking about the Old Wall media knocking down our door for coverage of #Quad4 at our office in Stamford, CT. He was talking about the NFL League meeting between 5 guys by the names of Halas, Mara, Marshall, Bell, and Rooney in 1934.
“Many of their friends thought they were out of their minds to continue” (with The League)… “Millions of sports fans around the country followed baseball, college football, horse racing, and boxing, but many did not know a professional football league existed.”
Despite being at this for the same number of years that the NFL was at that point (15 years old), many in this profession still don’t know what a #Quad4 Recession is. Until I hear many CEOs reference The Quads, I think Hedgeye’s vision remains our greatest opportunity.
Back to the Global Macro Grind…
Welcome to a big Macro Monday @Hedgeye where the Bulls and Bears are going to square off like Mahomes and Burrow did for the Chiefs and Bengals last night. They were playing for the AFC Championship. We’re only on Game 19 which is 7% into the 2023 Season.
A big part of having Full Investing Cycle vision is being able to contextualize immediate-term TRADEs within the context of The Cycle’s intermediate-term @Hedgeye TRENDs. Every bear market bounces “big” and often. “Feelings” about them happen lots too!
I’m old enough to remember only 1-month ago today, btw. That’s when the NASDAQ was at its Cycle Lows…
What’s fascinating about this recent NASDAQ ramp (it had 11 bear market rallies between 2000-2002 of +10% or more and the you could barely see the recession in GDP – it was very shallow, but the Profit Recession was #DEEP!), is Big Macro didn’t move last week:
- US Dollar Index was -0.1% last week
- CRB Commodities Index was -0.3% last week
- Yield Curve (10s minus 2s) was dead flat last week
But the betting at the #0DTE window for super-short term (Zero Days to Expiration) SPY and TSLA Calls was epic!
Nothing to see here, including what’s gong on in the Global Currency market where there are some #Quad4 Crashes in play:
- EUR/USD did nothing at +0.1% last week and remains Bullish TRADE and Bearish TREND
- Yen signaled its 1st lower-high in months vs. USD at -0.2% but is still Bullish TRADE and TREND
- GBP/USD did nothing at -0.1% last week and remains Bullish TRADE but Bearish TREND (like the Euro Signal)
- Argentina’s Peso was down another -1.8% vs. USD, taking its #Quad4 Crash to -15.6% in the last 3-months
- Russia’s Ruble was -1.0% vs. USD, taking its #Quad4 Crash to -11.9% in the last 3-months
- Pakistan’s Rupee was routed for a -8.3% loss vs. USD last week, taking its #Quad4 Crash to -11.7% in the last 3-months
Nowhere on CNBC (or wherever people are still picking the ponies) were these Currency Crashes commented on. But, like economic gravity, they still happened.
In Commodities it was a relatively uneventful week vs. that of FOMO US Stocks and Crypto:
- Oil (WTI) was actually down -2.4% last week (which is what happens in #Quad4) to -6.3% in the last 3-months
- Natural Gas continued to collapse -6.2%, taking its #Quad4 Crash to -47.3% in the last 3-months
- Palladium (PALL) was down another –7.2% last week, taking it to -18.1% in the last 3-months
Why call out Palladium (PALL) and Pakistan (PAK)? Because I’m short both. They got plowed to new Cycle Lows last week and that helped offset some of the squeezage in Consumer Discretionary (XLY) which was +6.4% on the week to +2.1% in the last 3-months.
Unlike a Rookie Short Seller in The League, I didn’t press XLY on the lows and get squeezed with a MAX (3% Short) position this whole bear-market-bounce-way-up. I waited to re-short it alongside Coffee (JO) on Friday AFTER it bounced!
Why is there a difference between what some of you “feel” about Coffee and QQQ’s? Are you not treating your inventory dispassionately on the short side in terms of UNITS OF RISK within their respective RISK RANGES?
Are you going too bigly too early in QQQs only? Are you not diversifying (your short book) around Global #Quad4?
I don’t know what mistakes you did or did not make. The entire world can see every one I’ve made for 15 years now. They are #timestamped and I am always focused on learning from those mistakes instead of whining and complaining about them.
What was not a mistake was getting out of our longstanding Asset Allocation to Turkey (TUR), for example, before last week’s -5.4% decline. Not being long India (INDA) which was down -3.1% last week was a win inasmuch as being Long China has been.
Short-term wins and losses matter. They happen often. What happens less often is winning Full Investing Cycle Championships. To do that, you need to live and learn during each game of The Season. Stay with the process.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.35-3.62% (bearish)
UST 2yr Yield 4.05-4.30% (bullish)
High Yield (HYG) 74.96-76.70 (bearish)
SPX 3 (bearish)
NASDAQ 10,706-11,721 (bearish)
RUT 1 (bearish)
Tech (XLK) 126-138 (bearish)
Defense (ITA) 108-115 (bullish)
Utilities (XLU) 67.74-71.25 (bullish) `
Shanghai Comp 3135-3297 (bullish)
VIX 18.13-21.79 (bullish)
USD 101.30-105.18 (bullish)
EUR/USD 1.064-1.094 (bearish)
USD/YEN 127.90-131.90 (bearish)
GBP/USD 1.203-1.245 (bearish)
Oil (WTI) 77.88-81.95 (neutral)
Nat Gas 2.65-3.58 (bearish)
Gold 1 (bullish)
Silver 23.37-24.47 (bullish)
TSLA 110-187 (bearish)
Bitcoin 19,208-24,009 (bearish)
Best of luck out there this week,
KM
Keith R. McCullough
Chief Executive Officer
