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“I believe I can fly – I believe I can touch the sky…”

-R. Kelly

“I think about it (what can make markets go up, not down) every night and day… spread my wings and fly away.”

You remember the tune, right? While the 1996 movie (Space Jam with Michael Jordan and Bugs Bunny) was forgettable, Rolling Stone named I Believe I Can Fly one of the Top 500 songs of all time!

It’s perfect for whoever wants to get plugged chasing European stocks again this morning on the effervescent hope that the belief-system-in-central-market-planning isn’t breaking down.

Eurocopter! - Draghi cartoon 11.21.2014

Back to the Global Macro Grind

Has anything that’s happened in 2016 Japanese and/or European FX vs. Equity trading changed your mind on how this grand central-market-planning experiment ends? Or does the daily color on your screens drive your belief system?

“If I can see it, then I can be it

If I just believe it, there’s nothing to it”

In the span of a night’s sleep, my inbox has gone from “nice call Keith – I can’t believe the Euro ripped on Draghi Day and that they closed European stocks on the lows”… to “omg, omg – Keith, what about the LTR-triple-whiz-bang-Coco buying – can’t it work?”…

Do you really think Mr. Market cares what I think? The Question remains – what do you believe?

  1. Do you believe that the Japanese Economic and Profit Cycles are accelerating or slowing?
  2. Do you believe that the European Economic and Profit Cycles are accelerating or slowing?
  3. Do you believe that the US Economic and Profit Cycles are accelerating or slowing?

Moreover, what did you believe when it mattered 7%-25% higher across Global Equity markets?

  1. Do you believe that the market impact of #GrowthSlowing can be “smoothed” by central-market-planners?
  2. Do you believe that even though you don’t think that’s a “free market”, that it can happen anyway?
  3. Do you believe that since many believe markets can never really go down that they won’t?

I can tell you what I believe:

  1. Rates of change in growth and inflation can be measured, mapped, and capitalized on in macro markets
  2. When the rates of change go obviously negative, central-planners enter your decision making matrix
  3. When they corroborate reality (growth slowing) with policy panic, the belief system breaks down

Huh? Don’t you remember what happened in the USA in early to mid-2008? Don’t you remember when Larry Kudlow would get on a “markets in crisis” segment of CNBC begging the Fed for “shock and awe rate cuts to zero”?

It’s one thing to “cut rates 600 times, globally” during a 5-7 year Global Economic expansion. It’s entirely another to keep pushing on that string of a very tenuous belief-system AFTER economic cycles have already peaked and you’re about to enter a #recession!

Oh, right. No worries. Everyone who didn’t call the slow-down to begin with is very sure that the “probability of a US recession is now 20% vs. 21%” in the recent WSJ poll of linear-economists.


Quick question on that: if the probability is so “low”, what’s up with US investors begging Draghi to fly with “helicopter money” (and the Fed “being on hold” when they’re allegedly “raising rates”)?

I know. I know. Too many questions for a Friday. Futures are “ripping”, Bro!

Back to lecturing humans on flying, please note that when asked yesterday in the press conference, Draghi said “we haven’t discussed helicopter money… but it is interesting… although it does have some legal and accounting complexity.”

I believe I can stop there.

Our immediate-term Global Macro Risk Ranges are now (with intermediate-term TREND Research Views in brackets):

UST 10yr Yield 1.69-1.95% (bearish)

SPX 1 (bearish)
RUT 1007-1103 (bearish)

NASDAQ 4 (bearish)

Nikkei 152 (bearish)

DAX 9 (bearish)

VIX 15.88-22.66 (bullish)
USD 96.52-98.70 (bullish)
EUR/USD 1.08-1.11 (bearish)
YEN 111.69-114.63 (bullish)
Oil (WTI) 30.89-38.99 (bearish)

Nat Gas 1.61-1.86 (bearish)

Gold 1 (bullish)
Copper 2.10-2.30 (bearish)

Best of luck out there today,


Keith R. McCullough
Chief Executive Officer

Eurocopter! - EUR CoD