“The two most prominent theories related to motivation and human flourishing are self-determination and self-efficacy.”
-Steve Magness
I thought that was a profound quote for any professional who wants to perform at the highest level. When it comes to chasing these bloody bubbles that have been imploding for > 15 months, I’m proud to say I’ve had zero FOMO.
Have you? Be honest with yourself. When it comes to YOUR performance and getting better, there’s no other way to be with yourself. If you’ve chased any of these #Quad4 Bear Market rallies to lower-highs, ask yourself why?
Self-determination and self-reflection are not easy things.
That’s why Magness called his #behavioral and performance book Do Hard Things. Mental Toughness matters.
“Our level of control changes how we respond to stress. When we have a sense of control, our alarm (FOMO) is quieter and easier to shut off.” (pg 95)
Back to the Global Macro Grind…
If there was a spot for another Bear Market Rally to LOWER-HIGHS to fail, we’re getting very close to it. Yes, I went ALL CAPS on you twice already this morning using the words YOUR and LOWER-HIGHS. Why?
A) YOUR decisions at both the TOP-end of Risk Ranges and LOWER-HIGHS are yours, not mine
B) As hard as it can be to coach you hard, I want nothing more than for you to #GetBetter
If you’re one of our subscribers that doesn’t want or need to be coached, I’m totally cool with that. Some of you just want to know what I’m saying and doing. I appreciate that and I’m cool with that too.
WHY I say or write something almost always has to do with WHEN something is at the TOP or BOTTOM end of my Risk Ranges and here are 2 really important RULES for those of you who want to be coached to play The Game my way:
A) Don’t buy/chase at the TOP-end of my Risk Range™ Signal
B) Don’t sell/short at the LOW-end of my Risk Range™ Signal
2-more Rules within the Rules-Based #Process:
A) Don’t buy Bearish @Hedgeye TRENDs
B) Don’t sell/short Bullish @Hedgeye TRENDs
Examples:
A) NVDA and META are Bullish @Hedgeye TREND Signals in the Risk Range™ Signal product
B) NFLX and AMZN are Bearish @Hedgeye TREND Signals in the Risk Range™ Signal product
While #Bubblecap NVDA is a new add to the product this morning, the signal isn’t new. Neither are the META, NFLX, or AMZN signals. That’s the thing about TRENDs, they TREND.
What do my analysts think? Andrew Freedman has been bullish on META and bearish on NFLX. Brian McGough reiterated his Bearish view on AMZN on The Call @Hedgeye yesterday, and Ami Joseph is debating adding NVDA as a Best Idea Short.
But I won’t short NVDA because I think it’s a Storytelling #BubbleCap or because Ami decides to add it to our list one day. Go back to my rules. They override my “thoughts.” There are no feelings.
While I have no “feelings” in my process, those who continue to chase The Mother of All Bubbles have many.
Let’s look at the anatomy of yet another Bear Market Lower-High in QQQ, IWM, and SPY yesterday:
A) Goldman’s Profitless Tech Basket led the “market is up” day with a +5.0% move
B) Goldman’s Bitcoin Sensitive Equity Basket was +4.2% on the day
To be fair, those were beaten by the beaten down US Regional Bank ETF (KRE) which was +5.7%. If you were long all 3 of them, congrats on having a day. As for how you’ve done being long those for the last 15 months of #Quad4, my condolences to you.
And how about one of the many massive bubbles inside of The Mother of All Bubbles (YOLO short-term Call Buying):
A) The Tesla (TSLA) weeklies were back, baby! Over 194,000 of the $200 strike weeklies were chased yesterday
B) The AAPL weeklies saw > 133,000 of the $160s bought and chased (the weeklies expire this week, fyi)
While this type of bad behavior was bludgeoned from the FEB 2nd LOWER-HIGHS in US Equities to the March lows (and the people who behave this way needed epic government bailouts to end their recent short-term pain), it didn’t go away!
Gamestop (GME) +50% on the earnings print happened too last night. All good. No worries, eh?
If I’m right on getting near the “spot” where it all goes down together again (Energy Stocks, Financials, #BubbleCaps, Short Squeeze Memes, etc.), those who refused to be coached through Phase III of The Bear are un-coachable at this point.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.28-3.99% (bearish)
UST 2yr Yield 3.48-4.95% (neutral)
High Yield (HYG) 72.61-74.18 (bearish)
SPX 3 (bearish)
NASDAQ 11,005-11,998 (bearish)
RUT 1 (bearish)
Tech (XLK) 133-147 (bearish)
VIX 20.78-29.43 (bullish)
USD 102.60-105.82 (bullish)
Oil (WTI) 63.61-72.99 (bearish)
Gold 1 (bullish)
Copper 3.81-4.05 (bearish)
Silver 20.02-23.39 (bullish)
AMZN 88-103 (bearish)
META 180-212 (bullish)
NFLX 287-314 (bearish)
TSLA 165-199 (bearish)
NVDA 219-272 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
