“I come from a long line of proud and pugnacious people.”
-Rickson Gracie

Fully loaded with my Irish-French-Canadian mutt blend, I come from a long line of proud people too. There are few books that transport me into #behavioral submission like the life story of Rickson Gracie just did.

Thanks to him, I know I am in flow today, and I like it.

For those of you who don’t know who Rickson or his 29 Brazilian Brothers/Cousins are, no worries. I didn’t either. As you all know, I’m a lover, not a fighter, so I wasn’t up to speed on what this man did for both Jiu Jitsu or MMA fighting.

If you were buying and covering yesterday, #WellDone.

If you weren’t, that’s too bad. Breathe: A Life In Flow, will help coach you through the #behavioral realities of winning in both life and The Full Investing Cycle Game.

Buy, Cover, Breathe - 02.22.2023 bear cartoon

Back to the Global Macro Grind…

At my MAX this year, I had 28 Shorts in Real-Time Alerts. This morning I have 1.

Don’t overthink it, trade it. Buy, Cover, Breathe. You can do this.

As a matter of discipline and #process, I get up at 435AM and allocate a 15 minute window of Clock Time between 530-545AM ET (every morning) to write my “Top 3 Things.”

If I’m in my regular work flow, they go out to our Institutional Research clients and Macro Pro subscribers thereafter. They also provide the content for the first 10 minutes of The Macro Show too.

This morning it took me 8 minutes to write this:

After 4 straight down days for SPY, US Equities signaled immediate-term TRADE #oversold yesterday…

  1. USD – not surprisingly, my immediate-term TRADE #oversold signals in everything Beta (QQQ, Bitcoin, etc.), are happening in conjunction with my immediate-term TRADE #overbought signal (within its Bullish #Quad4 TREND) in both the US Dollar Index and the major FX pairs that I show you in our daily Risk Ranges (Yens, Euros, Pounds, Loonies)… so trade it
  2. COMMODITIES – USD and Short-term Rates (2yr) immediate-term TRADE #overbought = Oil and the CRB Commodities Index immediate-term TRADE #oversold. Don’t overthink it, trade it. No change to the Full Investing Cycle TREND = Bullish on Commodities, as an Asset Class, for 2 years (JUN 2020 to JUN 2022), and Bearish since – this should be a Counter TREND bounce day
  3. GDP – big Macro Tourist headline “news” day for the “soft landing” crowd that doesn’t know how to Nowcast and/or model US GDP – today is the 2nd reading of old news (i.e. the Q4 GDP reading) which will be “up” +2.5-2.9% sequentially (which means it #slowed to right around 1% year-over-year), so that should help lock in your USD and UST 2yr Yield #overbought Signals as well

Immediate-term @Hedgeye Risk Ranges: SP500 = 3; UST 10yr Yield = 3.63-3.99%

When the numbers (and words explaining them) come out of my head like that, I am in flow. When it takes me 13-15 minutes, I am grinding but “seeing The Game” less clearly. That’s ok. That’s The Game.

Don’t confuse me seeing The Game clearly with me winning every one of those games. I now understand that winning at the highest level of Mixed Martial Arts (like Gracie did) is no different. #Patience is the most core discipline.

You don’t just get to “see it”… you have to wait on it… and WHEN you see your opponent (in my case the market and/or the other side of the trade) making a critical mistake, you execute.

What am I waiting for?

A) The LOW end of my Risk Range™ Signal and/or
B) The TOP end of my Risk Range™ Signal

You can ask me 1,000 questions about what I “think” or “feel” about the market and/or a position that I am risk managing (i.e. trading), but I’m always going to give you the same answer WHEN I see either or both of those things.

When I get both (USD #overbought, US Equity and Commodity Beta #oversold), it’s crystal clear.

It has nothing to do with The Quads or The Cycle. It has nothing to do with how “bearish” I was on FEB 2nd of 2023 or on JAN 11th of 2022. It has everything to do playing The Game in front of you. If you want to risk manage it like I do, that is…

And, again, if you don’t want to do it that way, don’t. I didn’t say it was easy. It’s really bleeping hard to stay disciplined when you can’t breathe. Buying/Covering on red? Most are really bad at it because they can’t control their emotions.

“My dad believed that if your mind and will are not strong, you’ll spend your entire life getting carried away by your desires and weaknesses. You’ll spend your whole life paying for things you don’t want.”
― Rickson Gracie, Breathe: A Life in Flow

Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets

UST 10yr Yield 3.63-3.99% (bullish)
UST 2yr Yield 4.43-4.74% (bullish)
High Yield (HYG) 73.21-75.92 (bearish)            
SPX 3 (bearish)
NASDAQ 11,306-11,896 (bearish)
RUT 1 (bearish)
Tech (XLK) 134-141 (bearish)
Defense (ITA) 114-119 (bullish)
Shanghai Comp 3 (bullish)
VIX 19.07-24.21 (bullish)
USD 102.80-104.86 (bullish)
EUR/USD 1.058-1.075 (bearish)
USD/YEN 131.21-135.99 (bullish)
GBP/USD 1.195-1.218 (bearish)
CAD/USD 0.733-0.745 (bearish)
Oil (WTI) 73.24-77.98 (bearish)
Nat Gas 1.96-2.64 (bearish)
Gold 1 (bullish)
Copper 3.94-4.23 (bullish)

Best of luck out there today,

Keith R. McCullough
Chief Executive Officer

Buy, Cover, Breathe - THURSCOD