Forget Valuation—Follow Signal Strength
In this clip from “The Macro Show,” Hedgeye CEO Keith McCullough breaks down why signal strength—not valuation—is the key to smart investing.
He pushes aside conventional metrics like upside/downside ratios, focusing instead on what Hedgeye’s process does best: measuring risk-adjusted signal strength. And right now, one asset stands above the rest.
"Signal strength, by the way, would say that when there's less upside, there's stronger signal strength sometimes,” McCullough explains.
His current top allocation? Gold.
Despite what some might see as limited upside, McCullough points to gold’s consistent bullish trend, tight technical setup, and all-time high breakouts as reasons it’s commanding the strongest signal in his model.
He defines signal strength through Hedgeye’s rules-based process: assets that are bullish on both TRADE and TREND durations, and consistently making higher highs and higher lows in the risk range.
“There is no emotion. My process is rules-based. Every single day I execute on it,” McCullough says.
