“Success is not the result of spontaneous combustion. You must set yourself on fire.”
-Arnold Glasgow
Love that quote. It’s the one Malcom Jenkins uses to introduce Chapter 3 in What Winners Won’t Tell You: “Compete.”
What’s your daily grind? What time do you wake up? What do you do throughout every hour of every Game Day? Is your #process repeatable? Is it differentiated? Is it designed to beat the crowd? Do you think you can grind it out for 15 to 45 years?
Unlike the NFL, where Jenkins played for 13 years, you don’t have to worry about someone running you over in the elevator. You need your head right though. The #behavioral part of YOU matters. It won’t happen through spontaneous combustion either.
Back to the Global Macro Grind…
I’m old enough to remember the morning of October 11th, 2023. After checking-down my entire decision-making #process, I decided it was the right time to put “Sell SPY, HYG, etc.” in the title of the Early Look.
I wasn’t “right” that day. SPY closed-up another +0.4% on the day for its 4th straight up day (and down -4.6% since I started shorting SPY on AUG 1, 2023). So I went to -14.7% Net Short into that day’s market close.
Since, SPY has been down for 7 of the last 8 days…
A much broader basket representation of “US Stocks” (i.e. our Core Short position in the Russell 2000) was down another -0.9% yesterday, taking its DRAWDOWN to -16.7% since AUG 1, 2023 and its Full Investing Cycle Crash to -31.8% from its Cycle Peak.
Cool. You’re so good, Mucker (that’s with an M).
Not really. I was just better than the crowd. None of you should pay me to chase like they do. If I got sucked-in and chased those BIG LOWER-HIGHS in July, you should have fired me. You’re not paying for me to be a hero. You’re paying me to execute on the process.
Now what? A: Long/Short Book is back to -0.5% Net Short this morning after booking a bunch of gains on the Short Side.
Am I “bullish”? A: Yes. On Oil and Energy Stocks. Here’s what moved up The MFO (Mucker Family Office) Long Only yesterday:
- Oil (USO)
- Large Cap Energy Stocks (XLE)
- Small Cap Energy Stocks (PSCE)
Both my analyst and #VASP Signals are also bullish on both GOOGL and META heading into their EPS prints too.
The problem, of course, with that is that the crowd is long of those two stocks alongside The Freebird (Andrew Freedman) heading into the event risk. It’s less of a problem now that both stocks have corrected towards the LOW-ends of their Risk Ranges.
As a matter of #process, I produce Risk Range™ Signals by 6AM ET, every Game Day (unless I sleep in for 30-45 minutes). We’re about to launch a new MAGMANT standalone (daily) risk management product in Q4 as well.
*Backslapping Note: how about my Bitcoin Signal going Bullish TREND @Hedgeye right on time?
I also send you my “re-ranked” Long Only positions (re-ranked by SIZE) in our new Portfolio Solutions product.
So, the SPY Short worked. Sometimes it won’t. But I will ALWAYS play The Game with full transparency, holding myself to account so that I can always try to #GetBetter.
What else? How about yesterday’s move in Bond Yields?
After my boy Bill Ackman (who evidently does Macro now) finally realized that his “Sell Treasuries Call” was killing his super-duper concentrated stock picker portfolio, he told his crew at CNBC he’s out. Thanks, bud.
Back to your #process, if you wake up in the morning looking for “calls” like that, my team is going to beat you badly, over Full Cycle Time. With everyone on CNBC now posing as a Rates Expert, like Jenkins, we’re looking for interceptions!
The same risk management #process that has had us buying INFLATION (via Energy, Uranium, etc.) since July is the same risk management #process that has had us buying every damn dip in US Dollars (UUP), and shorting Bond Proxies (XLRE, XLU, etc.).
That’s it. It’s not “making calls.” It’s executing on the Full Investing Cycle #process.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets:
UST 10yr Yield 4.63-5.07% (bullish)
UST 2yr Yield 4.97-5.25% (bullish)
High Yield (HYG) 71.37-72.97 (bearish)
SPX 4187-4331 (bearish)
NASDAQ 12,8686-13,390 (bearish)
RUT 1 (bearish)
Energy (XLE) 86.75-92.99 (bullish)
Utilities (XLU) 56.94-59.84 (bearish)
Shanghai Comp 2 (bearish)
Nikkei 30,821-31,998 (neutral)
BSE Sensex (India) 64,251-66,502 (bullish)
DAX 14,617-15,291 (bearish)
VIX 16.64-22.92 (bullish)
USD 105.40-106.75 (bullish)
EUR/USD 1.048-1.067 (bearish)
Oil (WTI) 83.37-89.97 (bullish)
Gold 1 (bullish)
Copper 3.45-3.66 (bearish)
AAPL 169-180 (bearish)
META 306-331 (bullish)
GOOGL 133-143 (bullish)
Bitcoin 28,736-34,590 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
