“Be decisive. Don’t take too much counsel of your fears.”
-Admiral William H. McRaven
As long-time subscribers to our process know, I focus my reading/learning on 3 main subject areas: Math, History, and #Behavioral. Since my math doesn’t change much, the biggest opportunity for me to #GetBetter is in MY behavior.
While changing MY behavior and how I make decisions is far from “easy”, it’s a LOT harder to coach YOUR behavior. That’s why I’m going ALL CAPS on YOU on that point this morning. YOU are the only one who can really change your behavior.
As McRaven goes on to coach in The Wisdom Of The Bullfrog, “be thoughtful, but not paralyzed by decision” (pg 32). I don’t suggest you “don’t think.” But I’m adamant that you don’t “feel” when you make buy/sell decisions.
Back to the Global Macro Grind…
For those of you who have watched me coach and/or play a hockey game, you know I have LOTS of feelings. If anything, that means that my thick hockey skull has had more of an upward battle than most. Being dispassionate isn’t in my DNA.
But being dispassionate, apolitical, and rules-based in my buy/sell decisions, I must be. After 25 years of hitting these bloody buttons, the alternative to that execution strategy has blowup-risk and outcomes that neither me nor my family can afford.
So, should I get Long the Russell 2000 today?
A: No.
Why? A: it’s nearing the Top-end of its Risk Range™ Signal and I don’t buy anything there.
Ok, so did I short-more Russell 2000 yesterday in Real-Time Alerts?
A: No.
Why? A: it’s nearing my critical TREND ™ Signal Breakout Level of $205 on IWM.
If my longest standing US Equity Index Short position (I’ve shorted the bloody thing at EVERY lower-high for over 2 YEARS now and made money doing so) finally breaks through my critical threshold level, I’ll start buying it.
If it doesn’t, I’ll resume shorting it.
That’s it. I don’t have to boil the ocean on that decision and/or engage in some intellectual debate about “valuation.” I’m not an intellectual. I am a Mucker. And I am becoming as consistent and disciplined as I’ve ever been.
Ok, cool, “so what have you been buyin’ for the fam in The Wee MFO, there Mucker?”
- I bought more India (INDA and SMIN)
- I bought more Uranium (URA, NLR, URNM, URNJ)
- I bought more Cannabis (MSOS and WEED)
Did you know that in Belfast your “Mucker” is what you call your buddy or your mate? I’m nicer than you think.
Don’t you think it’s kind of nice to have someone show you what he or she is doing with their hard-earned capital, every day? If I get one of these bloody (word of the day, eh!) Real-Time Alerts wrong, LOTS of people come after me! But that’s ok.
Not shorting more of a Core Short is a signal. So is buying-MORE of Core Longs. I have plenty of places to invest my hard-earned capital right now. As the Irish like to say, they’re “setten’ right there for ya.” Those 8 ETFS = 22% of my Core Asset Allocations!
Yep, not to be confused with the 1 major Asset Allocation that virtually ALL of American 401ks, “Target Funds”, etc. HAVE to have right now (i.e. the 5 US Stocks that = 25% of the SP500’s market cap), we can Go Anywhere with our hard-earned $$$.
3 of the #MM7 names (MSFT, AAPL, TSLA) were down yesterday. Collectively, they explained -15% of the SPX “down” day.
Reminder: we’re still signaling Bullish @Hedgeye TREND on 5 of the 7 #MM7 stocks. Quantitatively (#VASP Signals) in our new Momentum Stock Tracker product we’re Long: MSFT, AMZN, META, GOOGL, NFLX. We’re Short: AAPL and TSLA.
The Broadening Bull Market in SPY was elsewhere yesterday:
- 67% of US Stocks in SPY were up on a SPY -0.1% DOWN day
- +1.4% was the average up move for the SPY stocks that were up
- 8 of 11 US Equity SPY Sector Styles were UP on the “down” day
Why? Since I’ve said it every day for a few weeks now, we should be getting a #Quad1 Goldilocks CPI (US Inflation) report this morning. As a reminder, “narrow #Quad4” or outright #Quad1 trades the same way for US Equities.
That’s why I’m still Net Long US Equities with a Diversified Book of Long Exposures, and don’t “feel” a thing about it.
Immediate-term Risk Range™ Signal with @Hedgeye TREND signal in brackets
UST 10yr Yield 3.88-4.26% (bearish)
UST 2yr Yield 4.20-4.56% (bearish)
High Yield (HYG) 76.80-77.62 (bullish)
Investment Grade (LQD) 107.33-110.87 (bullish)
SPX 4 (bullish)
NASDAQ 15,375-16,151 (bullish)
RUT 1 (bearish)
Tech (XLK) 199-210 (bullish)
Insurance (IAK) 105.25-108.37 (bullish)
S&P Momentum (SPMO) 70.49-75.99 (bullish)
Healthcare (PINK) 28.48-30.14 (bullish)
BSE Sensex (India) 71,022-72,505 (bullish)
VIX 12.41-14.80 (bearish)
USD 103.11-104.81 (bullish)
Oil (WTI) 71.15-78.19 (neutral)
Nat Gas 1.72-2.15 (bearish)
Gold 2018-2076 (bullish)
Uranium (URA) 29.11-32.41 (bullish)
MSFT 401-422 (bullish)
AAPL 182-191 (bearish)
AMZN 162-181 (bullish)
META 413-515 (bullish)
GOOGL 138-150 (bullish)
NFLX 550-570 (bullish)
TSLA 176-196 (bearish)
NVDA 665-752 (bullish)
Bitcoin 44,661-51,858 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
