[UNLOCKED] Keith's Daily Trading Ranges

We've made some new enhancements to Daily Trading Ranges - our proprietary buy and sell levels on major markets, commodities and currencies sent to subscribers weekday mornings by CEO Keith McCullough. Click here to view a brief video of McCullough explaining how to use it most effectively.


Subscribers now receive risk ranges for 20 tickers each day -  the last five of which are determined by what's flashing on Keith's screen and by what names subscribers are asking about. Click here to subscribe.


  • Bullish Trend
  • Bearish Trend
  • Neutral

10-Year U.S. Treasury Yield
1.80 1.70 1.75
S&P 500
2,038 2,082 2,066
Russell 2000
1,098 1,126 1,116
NASDAQ Composite
4,682 4,799 4,775
Nikkei 225 Index
16,011 16,820 16,466
German DAX Composite
9,794 10,068 9,952
Volatility Index
13.55 17.43 14.68
U.S. Dollar Index
93.11 94.99 94.55
1.12 1.15 1.13
Japanese Yen
106.44 109.99 109.07
Light Crude Oil Spot Price
45.16 49.13 48.61
Natural Gas Spot Price
1.96 2.22 2.03
Gold Spot Price
1,258 1,295 1,275
Copper Spot Price
2.03 2.13 2.09
Apple Inc.
89.99 95.01 93.88
657 720 710
McDonald's Inc.
127 132 129
Utilities Select Sector SPDR
48.41 49.92 49.45
Alphabet Inc.
700 740 730
Facebook Inc.
116 121 118

INSTANT INSIGHT | Where We're Headed: U.S. Dollar, CRB Index & Gold

INSTANT INSIGHT | Where We're Headed: U.S. Dollar, CRB Index & Gold - dollar cartoon 07.02.2014 large 

Get the direction of the U.S. Dollar right, and you'll get most things in macro right. As we've noted before, the dollar has a material inverse correlation to the CRB index, gold, and the S&P 500. So, with the dollar up three of the last four weeks, that's been a major headwind for the "S&P is gonna rip to all-time highs" crew. It also helps explain why the S&P 500 has been down three straight weeks.


Where do we go from here?


Here's analysis via Hedgeye CEO Keith McCullough in a note sent to subscribers earlier this morning:


"Interestingly, but maybe not surprisingly, the US Dollar Index is starting to stabilize and signal a series of higher-lows (93.11 support) within its bullish long-term setup – consensus (CFTC futures/options) is positioned bearish USD and long Oil and Gold here."



Take a look at the chart of the CRB index. Upon closer inspection, the parallels between the commodities index and the U.S. Dollar are fairly obvious: 


"CRB Index (19 commodities) looks like the upside down of the USD on a 3yr look-back – inasmuch as USD would have to breakdown and hold below the 92-93 range, CRB would have to breakout above the 190-192 range and my math doesn’t see that happening anytime soon."



Then there's gold. We're still bullish ... but only at the right price.



More to be revealed.

CHART OF THE DAY | Correlation Risk: U.S. Dollar, CRB Index

Editor's Note: Below is a brief excerpt and chart from today's Early Look written by Hedgeye CEO Keith McCullough. Click here to learn more.


"... Putting our immediate-term TRADE signal in the context of long-term TAIL risk:

  1. US Dollar Index would have to sustain a break-down through the 92-93 level
  2. CRB Commodities Index would have to sustain a break-out (on accelerating volume) through the 190-192 level

*As of this morning, the US Dollar Index and CRB Commodities Index are trading at 94.55 and 185, respectively."


CHART OF THE DAY | Correlation Risk: U.S. Dollar, CRB Index - 05.17.16 EL Chart

Daily Trading Ranges

20 Proprietary Risk Ranges

Daily Trading Ranges is designed to help you understand where you’re buying and selling within the risk range and help you make better sales at the top end of the range and purchases at the low end.

Cartoon of the Day: Cheap, Cheap, Cheap...

Cartoon of the Day: Cheap, Cheap, Cheap... - Cheap cartoon 05.16.2016


"I still say short what appears to be “cheap” and keep buying what continues to get more expensive," Hedgeye CEO Keith McCullough wrote in this morning's Early Look.

#Timestamped: Why The Worst Is Yet To Come For U.S. Growth

#Timestamped: Why The Worst Is Yet To Come For U.S. Growth - GDP cartoon 01.30.2015 large


While Wall Street still expects rainbows and puppy dogs for U.S. growth... our Macro team prefers to deal with economic reality. We have been (and remain) the Growth Bears. Further vindication of our non-consensus economic call arrived just a few short weeks ago, when 1Q16 GDP came in at 0.5%, well below the rosy picture painted by consensus, but nailed by our Macro team.


We believe the worst is yet to come. Watch below as Hedgeye CEO Keith McCullough and Senior Macro analyst Darius Dale discuss why on The Macro Show.


1. An Animated History Of U.S. #GrowthSlowing



In this animated video, Hedgeye CEO Keith McCullough walks through the recent history of the #LateCycle U.S. economy, exploring peak corporate profits in 2014 to today’s lackluster growth.


2. McCullough: Why Our GDP Forecasts Are So Accurate



In this special excerpt from The Macro Show this morning, Hedgeye CEO Keith McCullough takes subscribers “behind the curtain” on our quantitative forecasting model and how we interpret and debate evolving economic data.


3. U.S. Economy Enters Most Difficult Part of Cycle



In this brief excerpt from The Macro Show, Hedgeye Senior Macro analyst Darius Dale discusses how the U.S. economy has entered the toughest part of the cycle and why our growth estimate remains so bearish.


4. Can Fed Stop Recessionary Selloff?



In this animated excerpt from The Macro Show, Hedgeye’s Keith McCullough, Darius Dale and Neil Howe respond to a subscriber’s question about whether the Fed can continue propping up the stock market as economic conditions deteriorate and a recession knocks on the door.


By the way...


Like what you see? Click here to watch a complimentary edition of The Macro Show from today, in its entirety. This one's on the house.

[UNLOCKED] Early Look: Sloppy Guesswork

Editor's Note: Below is a complimentary Early Look written by Hedgeye CEO Keith McCullough on 5/4/16. In it, McCullough discusses our process, Wall Street's poor economic forecasting track record, and why our GDP model has been spot on over the last 5 quarters. McCullough also nails the April "jobs bomb" ahead of the BLS's monthly jobs report that Friday. Click here to get the Early Look delivered in your inbox weekday mornings.


*  *  *  *


“Isn’t it time for such sloppy guesswork drawing to a close?”

-Phil Tetlock


Yesterday was a good day. The Long Bond was up big and I spent the day meeting with some of the largest hedge funds in my home state of Connecticut. I absolutely loved the debates.


The aforementioned quote (from a great book I’m reviewing called Superforecasting) really nails a common thread we hear from the sharpest institutional investors in the world when it comes to The Establishment’s US GDP forecasting process.


In one meeting in particular, the PM (who oversees an entire office of hedge fund PMs) read an excerpt from a sell-side note that said “GDP feels like it’s going to be 2.5% in Q2.” A feel? Really? I don’t feel anything in our predictive tracking algo, but we’re at 0.3%.


[UNLOCKED] Early Look: Sloppy Guesswork - GDP cartoon 05.29.2015 large


Back to the Global Macro Grind


Let me take that back. I do feel something. I feel really good when A) our GDP forecast is a long way from Old Wall consensus and B) consensus positioning in the SP500 (Index +E-mini futures/options contracts) is leaning as long as it has been for all of 2016.


Oh you bombastic Hedgeye boy, you.


Yep. I’m proud of both my people and process. We’ve actually been, on average, within 20-30 basis points of getting the US GDP number right for the last 5 quarters (the historical standard error in our model is 35 basis points).


The main reason why we’ve been so much more accurate than any other research department on accurately forecasting one of the most important factors in any economic model (growth) is that, instead of “feeling” it, we use modern-math and machines.


“After all, we live in an era of dazzlingly powerful computers, incomprehensible algorithms, and Big Data… isn’t it time for such sloppy guesswork drawing to a close? … The point is that if you have a well-validated statistical algorithm, use it.”

-Phil Tetlock, Superforecasting (pg 20-21)


While I am sure our forecasting #process will continue to evolve alongside technology and time, for now I probably sound overly confident that what we do crushes what they keep doing. With statements like this, how do you feel about it?


  1. “A rate hike could be appropriate, if the data is as expected.” –John Williams (San Francisco Fed Head, yesterday)
  2. The economy is offering mixed signals, but favors unemployment data.” –Dennis Lockhart (Atlanta Fed, yesterday)


Given that a recently reported GDP of 0.5% isn’t in the area code of “as expected”, I don’t think Williams has a lot of credibility as a Wall St. forecaster. But Lockhart’s Atlanta Fed actually has a “GDP Now” tracking model (that has recently had an intra-quarter standard error of 200-250 basis points!) that is NOT mixed. It’s flat out bad. So he’s “favoring” non-GDP data.


I know. I know. You’re probably saying to yourself that the Fed is obviously dovish now (US Dollar at a 16-month low, post Janet Yellen’s recent rate-cutting-of-the-hikes), so this banter from Williams, Lockhart, Bullard, etc. is just popycock and posturing.


I don’t disagree with that. Neither would most people I meet with.


In modern forecasting, we deal with everything in rate of change terms and then probability-weight surprises vs. expectations.


As the rate of change in the economic, profit, and credit cycle continues to slow, the probability continues to rise that the Fed’s latest of #LateCycle indicators (Employment) starts slowing at a faster pace.


In other words, you’re one NFP (non-farm payroll) jobs bomb away from both Trump and Sanders sounding really right on the economy.


I’m sure we have absolutely nothing to worry about if Trump or Sanders becomes President of the United States. But last night’s voting machine in Indiana reveals that it’s more than just Hedgeye (and the Bond Market) that gets what’s really going on in the US economy.


Instead of those who were “feeling” US GDP was going to be 3-4% with “falling gas prices” (last year), now they have to spin that into rising gas prices are good for US Consumer Confidence as both the conference board and Univ. of Michigan report hit new YTD lows.


It’s either sloppy guesswork or just the conflict of interest ridden cabal of The Establishment consensus doing what they think they have to do before it becomes obvious to The People right before The Election.


Our immediate-term Global Macro Risk Ranges are now:


UST 10yr Yield 1.72-1.87%

SPX 2053-2083
RUT 1101-1140

NASDAQ 4711-4844

VIX 14.26-17.83
USD 92.35-94.50


Best of luck out there today,



Keith R. McCullough
Chief Executive Officer


[UNLOCKED] Early Look: Sloppy Guesswork - 05.04.16 chart

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Risk Managed Long Term Investing for Pros

Hedgeye CEO Keith McCullough handpicks the “best of the best” long and short ideas delivered to him by our team of over 30 research analysts across myriad sectors.