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Takeaway: Discover how U.S. trade deficits, global tariffs, and commodity market shifts impact your investment strategy.

Editor's Note: This complimentary update offers a glimpse into the insights, ideas and market analysis we’re tracking at Hedgeye. Our full research and investing strategies are available exclusively to subscribers, providing deeper, data-driven perspectives to help you stay ahead.

Bitcoin, U.S. equities, and the broader market mood are starting the week in the red. Let's get into some actionable Macro insights to help you protect and grow your portfolio.

Macro Insights: How Dollar Strength, Tariffs & Oil Moves Impact Your Portfolio - 03.05.2018 tariff cartoon

At Hedgeye, we don’t guess—we plan, track, and assess. Using Rate of Change (ROC) analysis and our Volatility Adjusted Signaling Process (#VASP), we stay ahead of big market moves. Let’s dive in.

Keith’s Top 3 Things

1. FX – The Dollar Stays Strong
The U.S. Dollar Index continued its bullish TREND (3+ months), while the Euro and British Pound remain in freefall. If you're still long USD, it might be time to trim some exposure as it nears the top of its Risk Range™ Signal.

2. Commodities – Oil & Gas Bouncing Back
With crude oil and natural gas rebounding off TREND support, February is shaping up as a Quad 3 month—inflation accelerating and growth slowing. This marks a shift from January’s Quad 2 setup (inflation and growth both accelerating).

3. Volatility – Dealer Gamma Flips Negative
SPX futures are sliding as Dealer Gamma turns negative, with the VIX Risk Range™ Signal moving higher. If it fails at resistance, equities could catch a short-term bounce.

This Week’s Macro Playbook – What We’re Watching

Tariff Turbulence:
Markets are adjusting to the latest tariff talk, with trade tensions hitting global currencies. The Euro and British Pound are under pressure, while the U.S. Dollar remains the strongest currency on the board. 

Global Currencies:

  • USD Bullish: The Dollar Index gained another +0.9% last week.
  • Euro & Pound Bearish: Both continue their downtrends.
  • Mexican Peso & Canadian Dollar Cracking: Both saw another week of selling pressure.

Commodities:

  • Bullish TRENDs: Oil and agriculture remain in inflationary uptrends.
  • Copper Breaking Down: A key industrial signal rolling over.

Chart of the Day: The Dollar’s Bull Market Continues

The dollar's gains last week reinforced it's Bullish TRADE (3 weeks or less) and TREND. A stronger USD puts pressure on global assets—something we’ve been positioned for.

Macro Insights: How Dollar Strength, Tariffs & Oil Moves Impact Your Portfolio - cod  1

Fact of the Day:

While trade accounts for 67% of Canada’s GDP, 73% of Mexico’s GDP, and 37% of China’s GDP, it accounts for only 24% of U.S. GDP. However, in 2023 the U.S. trade deficit in goods was the world’s largest at over $1 trillion.

A PROVEN RISK MANAGEMENT TOOL: buy low, sell high

How can you successfully navigate all of this market volatility? Use Hedgeye CEO Keith McCullough's Risk Range Signals to help you buy low and sell high.

Keith developed his signaling algorithm during his years as a hedge fund manager to forecast the likely price movements of publicly traded assets—and continues to refine his model for greater accuracy. Today, Keith's Risk Range Signals help Hedgeye Nation stay ahead of big price moves for stocks, ETFs, and crypto assets.

Here's complimentary access to today's editions:

  • Bitcoin Trend Tracker: Receive daily trading signals on BTC, ETH, and top crypto assets, backed by key market data to help you manage your trades.

  • Risk Range Signals: Get 30+ daily risk ranges for major asset classes, stocks, and ETFs (SPX, USD, GLD, NVDA, and more!), providing the insights needed to make informed decisions.

Staying aligned with these signals keeps you positioned for success, no matter the market conditions.

Best,

The Hedgeye Team