We’re kicking off the week with clear, data-driven insights. At Hedgeye, we focus on cutting through the noise with numbers, discipline, and timing—not narratives.
These Top 3 Things come from The Macro Show—our daily playbook for managing market risk and capitalizing on opportunities, delivered in a fast-paced 30-minute webcast.
1. USD Breakdown → #Quad2 Revival
We’re back in what we call #Quad2—an economic environment where growth and inflation both accelerate, and risk assets (like tech stocks and crypto) tend to perform well.
The key pattern? Dollar Down, Rates Up, Stocks Up.
Here’s what happened:
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The U.S. Dollar Index (DXY) is hitting fresh lows, staying in a bearish TREND (meaning the longer-term signal points down).
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On Friday, we saw a brief #Quad4 setup—where the Dollar often rises and stocks tend to drop—but that didn’t stick.
- Our FX positioning includes short USD (you get paid if the dollar keeps falling).
2. Global Equities: Quad2 ≠ One-Day Blip
Markets didn’t flinch at Friday’s dip—that was a head fake, not the start of a downturn: Korea (KOSPI) jumped +1.8% overnight. Spain (EWP) led European gains at +1.1%
Our global equities positioning is bullish:
- Long Europe four different ways
- Long Emerging Markets three different ways
- Long other Global Equities five different ways
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What does #Quad2 mean for equities? Risk-on environments like #Quad2 generally fuel global stock market strength—and our signals say stay the course. |
3. Volatility:
Our proprietary Risk Range™ Signals—a model that uses price, volume, and volatility to identify key levels—are showing lower volatility ahead:
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The VIX low-end Risk Range™ hit 15.74 this morning—a lower low. That suggests falling fear and a friendlier environment for stock growth.
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Both S&P 500 volatility (VIX) and NASDAQ volatility (VXN) remain in Bearish TRENDs, meaning we expect volatility to stay subdued.
Key catalysts to watch:
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The 6000 SPX strike (big options level) as we head toward June expiration.
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Monthly options expiration Friday → large “gamma” positions rolling off could open the door for bigger market moves.
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FOMC Wednesday + market closed Thursday (Juneteenth) → Normally, reactions to Fed meetings show up the day after, but with the holiday, we might see more immediate volatility during the meeting.
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