“All wars are fought twice, the first time on the battlefield, the second time in memory.”
-Viet Thanh Nguyen
Lots of people want/need me to say it. So why don’t you just say it. The Perma Bull case for Profitless Tech, Crypto (which was a bloodbath overnight), and now AI is/was a “dovish pause” and/or pending rate cuts…
What they want/need me to say is “I got it wrong”… YTD, of course.
Of course, you’d have to be an amateur SPY Monkey (who isn’t short Credit, Currencies, Commodities, Energy Stocks, the FIRR, etc.) to call our 19-month old #Quad4 Growth Slowing call that way, but so be it. I am at war with Old Wall mediocrity.
Back to the Global Macro Grind…
What fascinates me about the Old Wall’s latest fascination with “AI” is that they love it and they’re big time long of it, but they definitely don’t want to apply it to their economic nowcasting #process.
If they did, they’d know that 100% of the time that the Federal Reserve raises rates into a #Quad4 slowdown, things crash… and then Old Wall is right back to where they’ve always been – begging for a Fed Bailout and rate cuts.
They won’t talk about the March lows. They won’t say it. These one-dimensional one-way “investors” will say nothing.
The aforementioned quote comes from a #history book that I started reading after visiting my ancestor’s homeland of Ireland last week. Not ironically, it’s called Say Nothing.
It’s a true history of “murder and memory in Northern Ireland” by Patrick Radden Keefe.
I’m sure it’s not all “true”, but in principle it has to be. Almost every caddie who spent a round of golf with me would talk to me about it. One, who was a retired Minister, prayed for me (I needed it) before many shots!
Make no mistake. I have been at war with the Old Wall and its conflict of interest media for 15 years. It’s whitened my hairs and hardened my soul. When this Cycle is finally done slowing, I think it will finally be the end of them.
Is it a hard fight? You’re damn right it is. Is it for me? No, it’s for my kids. And it should be for yours too.
So let’s get on with it, eh. Here are some particular callouts from my notebook and #process this morning:
- FX: pre Powell, intraday, my #VASP (Volatility Adjusted Signaling Process) signaled BUY USD vs. JPY yesterday
- COMMODITIES: reiterating Short Oil, Copper, etc. any time they touch the TOP-end of my Range like CPER did
- CREDIT: #BLH (big-lower-high) signals on both HYG and JNK yesterday, I’d be shorting more here on the open
- GOLD: after signaling sell-SOME (Macro Pro Asset Allocation product) yesterday, I buy-MORE today
- SILVER: same sell-some (yesterday) signal; today it’s a Buy Signal
- JAPAN: our largest Global Equity Asset Allocation is signaling immediate-term TRADE #overbought
- CHINA: May Industrial Production data #slowed another -210bps from April, reiterating Global Industrial Recession
- INDIA: signaling #Quad1, like Japan is, so buy the damn dips (INDA)
- AUSTRALIA: Signaling sell the Bear Market bounces to lower-highs (EWA)
- EUROPE: signaling #Quad4 Recession in France (EWQ), Finland (EFNL), and Austria (EWO) – I’m now short all 3
- FIRR: don’t be a SPY Monkey, short the Top 4 Signal Strength US Sector Shorts (Fins, Industrials, Real Estate, Retailers)
- RATES: 30yr Yield signaling another LOWER-HIGH, buying-more BNDD
- CURVE: Signaling #Quad4 Recession with 10s2s inverted to a new #Quad4 in Q2 low of -91bps
- CRYPTO: recommending prayer
And make no mistake about that either. I pray 2x/day. And if you want to cancel on me for that, I’ll pray for you too. Don’t confuse my ability to tactically risk manage Tech #MOAB (Mother of All Bubbles) with how I think this is all going to end.
I haven’t been “bearish” for 6 months. If some of you have been bullish on 6 stocks for that time period after covering all your shorts at the DEC 2022 lows, I am sincerely happy for you.
I’m much longer-term than that. I am a proper Full Cycle Investor. My name is Mucker. In Belfast that’s local slang for “friend.” I’ve been bearish for going on 19 months, not 6. I am here to help The People preserve and protect their hard-earned capital.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 30yr Yield 3.82-3.97% (neutral)
UST 10yr Yield 3.61-3.86% (neutral)
UST 2yr Yield 4.40-4.75% (bullish)
High Yield (HYG) 73.89-74.95 (bearish)
SPX 4139-4386 (bearish)
NASDAQ 12,901-13,670 (bullish)
RUT 1 (bearish)
Tech (XLK) 162-173 (bullish)
Industrials (XLI) 97.80-105.03 (bearish)
Financials (XLF) 32.13-33.58 (bearish)
Shanghai Comp 3173-3242 (bearish)
Nikkei 31,215-33,539 (bullish)
VIX 13.73-20.09 (bullish)
USD 102.40-104.63 (bullish)
USD/YEN 138.77-141.23 (bullish)
Oil (WTI) 66.75-71.98 (bearish)
Oil (Brent) 71.93-75.90 (bearish)
Nat Gas 2.13-2.41 (bearish)
Gold 1 (bullish)
Copper 3.60-3.87 (bearish)
Silver 23.12-24.61 (bullish)
NVDA 357-433 (bullish)
Bitcoin 24,561-26,853 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
