“The most striking contradiction of our civilization is the fundamental reverence for truth, which we profess, and the thorough-going disregard for it which we practice.”
-Vilhjalmur Stefansson
Truth: a chart of US CDS looks like NVDA’s.
But let’s wake up to another morning of telling ourselves the latest narrative that the US government running out of money by June 1st (per Yellen’s comments last night) is bullish for stocks because of “AI”?
The aforementioned quote comes from a hilarious book that a subscriber from the Cayman Islands sent me titled “TRUTH: A Brief History of Total Bullshxt.”
Back to the Global Macro Grind…
I know it seems like a career ago, but last Wednesday I penned an EL titled “#Quad4 vs. AI.” It was the day I covered all but 1 of my Shorts in RTA (Real-Time Alerts). Timing matters.
You see, I get it. I’m so bloody brilliant at this point that I genuinely get Macro Tourism, chart & narrative chasing, etc. If I didn’t, why would I keep betting these bulls would buyem and chasem towards the top-end of my Ranges?
Now I’m back to 3 Longs and 6 Shorts and looking to triple the # of Shorts in RTA if people are numb enough to chase The Mother of All Bubbles #MOAB, again, into both slowing Global #Quad4 economic data and this US Debt Ceiling.
Got some truth this morning (as in reported #Quad4 Data)?
- USA’s ISM report for APR was a stinker with both the headline and New Orders in contraction < 50
- China’s ISM #slowed to 49.2 in APR vs. 51.9 in MAR
- Australia’s ISM #slowed to 48 in APR vs. 49.1 MAR (contraction is < 50)
Oh, and this massively huge economic “recovery” in Europe that the chart guys chat about equated to a recessionary PMI reading of 45.8 for the Eurozone in April (APR).
But, but “KM, the Prices Paid component of the US ISM report accelerated!” Yes, it did. That happened in April AFTER OPEC tried to centrally plan Oil prices higher. While that has since failed (Oil resumes Bearish TREND):
A) Both the Prices Paid in the ISM and the PCE Deflator in the GDP report keep the Fed RAISING RATES
B) Short-end of The Curve (UST 2yr Yield) is back UP to 4.11% on that Fed Policy expectation this morning
C) And the Yield Curve continues to re-invert with the Long-end (UST 10yr) -4bps to 3.52%
So what did I do on that yesterday?
- I moved from +8.9% Net Long (at last Wednesday’s SPY lows) to -8.1% Net Short yesterday
- I bought Long Duration Bonds (BNDD, TLT, IEF, and IIGD)
- I didn’t chase Dan A-Ives (NVDA)
A-Ives is the poster boy of bs who is going to bag-HODL TSLA to the lows. And since that piece of #MOAB was down again yesterday, all he’s gotta do is rant about the “ex-poh-nential AI age” while CNBC shows the NVDA chart.
Now let’s drum up the “AI” embedded in my fractal NVDA Risk Range™ Signal:
A) Immediate-term TRADE Risk Range™ Signal = $259-291/share
B) That puts -11% downside risk in play if they print $291
The best news for the #BubbleCap Bulls who are no longer long TSLA, AMZN, or NFLX (all 3 are signaling Bearish TREND and have lost their yolo chart-chasing momo) is they can simplify and only crowd into 3 names now:
- NVDA
- MSFT = 270-312 Risk Range™ Signal
- AAPL = 162-171 Risk Range™ Signal
Even better news is that every public company on the planet can bs you about “AI” until NVDA reports on May 24th. AAPL’s revenue reality has to be reported this Thursday.
All the while, even Crypto wasn’t willing to suspend Debt Ceiling and/or US CDS belief yesterday (Bitcoin got hammered post its month-end mark-up, like it did post its JAN 2023 month-end markup).
Think about that. Then think about “AI” vs. what these guys all “believed” about owning “blockchain.” The best part about believing is that it requires zero knowledge, Quads, or economic bubble perspective!
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.37-3.62% (bearish)
UST 2yr Yield 3.86-4.33% (bullish)
High Yield (HYG) 74.21-75.18 (bearish)
SPX 4036-4181 (bearish)
NASDAQ 11,721-12,243 (bearish)
RUT 1 (bearish)
Tech (XLK) 143-152 (bearish)
Utilities (XLU) 68.10-70.35 (bullish)
Nikkei 28,218-29,206 (bullish)
VIX 15.27-21.08 (bullish)
USD 100.99-102.17 (bullish)
Oil (WTI) 73.17-77.95 (bearish)
Gold 1 (bullish)
Copper 3.76-3.98 (bearish)
Silver 24.38-25.55 (bullish)
MSFT 270-312 (bullish)
AAPL 162-171 (bullish)
AMZN 99-109 (bearish)
NFLX 317-333 (bearish)
TSLA 147-174 (bearish)
NVDA 257-291 (bullish)
Bitcoin 26,909-30,301 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
