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Short Tokyo?

Takeaway: We still don't see signs of a rising sun anytime soon.

Heli-Ben IV ran out of fuel overnight – Yen ramped +1.5% to $104.23 and the Nikkei resumed its crash, closing down -1.4% to -21.6% from the Global Equity #Bubble high of 2015. Reiterating the short on Japanese Equities; fighting the BOJ continues to work as the #BeliefSystem continues to break-down.

 

Short Tokyo? - nikkei usdjpy

 

Editor's Note: The snippet above is from a note Hedgeye CEO Keith McCullough wrote for subscribers this morning. Click here to learn more.


Daily Market Data Dump: Tuesday

Takeaway: A closer look at global macro market developments.

Editor's Note: Below are complimentary charts highlighting global equity market developments, S&P 500 sector performance, volume on U.S. stock exchanges, rates and bond spreads, key currency crosses, and commodities. It's on the house. For more information on how Hedgeye can help you better understand the markets and economy (and stay ahead of consensus) check out our array of investing products

 

CLICK TO ENLARGE

 

Daily Market Data Dump: Tuesday - equity markets 7 26

 

Daily Market Data Dump: Tuesday - sector performance 7 26

 

Daily Market Data Dump: Tuesday - volume 7 26

 

Daily Market Data Dump: Tuesday - currencies 7 26

 

Daily Market Data Dump: Tuesday - rates and spreads 7 26

 

Daily Market Data Dump: Tuesday - commodities 7 26


July 26, 2016

Want more from Daily Trading Ranges? CLICK HERE to submit up to 4 tickers you'd like to see on the list. 

 

  • Bullish Trend
  • Bearish Trend
  • Neutral

INDEX BUY TRADE SELL TRADE PREV. CLOSE
UST10Y
10-Year U.S. Treasury Yield
1.63 1.46 1.58
SPX
S&P 500
2,129 2,179 2,168
RUT
Russell 2000
1,179 1,215 1,207
COMPQ
NASDAQ Composite
4,951 5,120 5,097
NIKK
Nikkei 225 Index
15,909 16,970 16,620
DAX
German DAX Composite
9,903 10,258 10,198
VIX
Volatility Index
11.72 16.69 12.87
USD
U.S. Dollar Index
96.31 97.99 97.33
EURUSD
Euro
1.09 1.11 1.09
USDJPY
Japanese Yen
103.15 107.31 105.80
WTIC
Light Crude Oil Spot Price
42.28 45.13 43.13
NATGAS
Natural Gas Spot Price
2.60 2.83 2.71
GOLD
Gold Spot Price
1,311 1,354 1,327
COPPER
Copper Spot Price
2.11 2.26 2.21
AAPL
Apple Inc.
96.18 100.94 97.34
AMZN
Amazon.com Inc.
729 752 739
NFLX
Netflix Inc.
81.94 91.76 87.66
JPM
J.P. Morgan Chase & Co.
60.98 64.54 63.87
KMI
Kinder Morgan Inc.
19.25 22.23 20.86
GILD
Gilead Sciences
82.76 88.72 88.55



Hedgeye's Daily Trading Ranges are twenty immediate-term (TRADE) buy and sell levels, along with our intermediate-term (TREND) view.  Click HERE for a video from Hedgeye CEO Keith McCullough on how to use these risk ranges.


investing ideas

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.

CHART OF THE DAY: Long 2010 Brunello Vs. Short $QQQ

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.

 

"... For those of us who have been investing in real estate, private companies, gold, platinum, wine, an NHL team, etc., that’s an easy question to answer. With Italian wines in particular, #EuropeImploding has provided for some fantastic buying opportunities this year.

 

If you want a primer on investing in IGW (Investment Grade Wines), the aforementioned quote comes from a great book that my wife Laura got me, titled Investing In Liquid Assets. As David Sokolin likes to say, “with wine, there’s no such thing as a losing investment”… if you’re underwater, you eventually win by drinking it! Long 2010 Brunello vs. Short QQQ."

 

CHART OF THE DAY: Long 2010 Brunello Vs. Short $QQQ - 07.26.16 chart


Liquidate Pleasurably

“Whenever you wish, you can liquidate pleasurably.”

-David Sokolin

 

Since I’ve been both generating and raising cash as of late (Hedgeye cash flows without helicopters and I’ve been booking some gains in my biggest position, the Long Bond), in investor meetings I keep getting asked (sometimes told) “if there’s any alternative to stocks?”

 

For those of us who have been investing in real estate, private companies, gold, platinum, wine, an NHL team, etc., that’s an easy question to answer. With Italian wines in particular, #EuropeImploding has provided for some fantastic buying opportunities this year.

 

If you want a primer on investing in IGW (Investment Grade Wines), the aforementioned quote comes from a great book that my wife Laura got me, titled Investing In Liquid Assets. As David Sokolin likes to say, “with wine, there’s no such thing as a losing investment”… if you’re underwater, you eventually win by drinking it! Long 2010 Brunello vs. Short QQQ.

 

Liquidate Pleasurably - wine

 

Back to the Global Macro Grind

 

I guess the people who are in the business of marketing “stocks” for their long-term-compensation-run might say that you can #drink every time you’ve bought the all-time high in SPY for the last 17 years too. That’s cool, if you do it with other people’s money.

 

Otherwise, I think that big secular shifts in technology, transparency (bid/ask spreads in wine are readily available on LIVEX in London), and information have really opened up opportunities for people to truly invest for the long-run, across cycles, and asset classes.

 

Truly investing? Yes. To be able to buy low, sell high, and compound returns (without sucking up epic draw-downs), across asset classes… you need to pay for the truth. What you watch on CNBC is free for a reason.

 

As Ray Dalio would ask: “what is the truth” this morning, according to the people with no skin in the game (central planners)?

 

  1. BOJ (Bank of Japan) – is now backing off on the helicopter comments in exchange for the “double fiscal thrust” ones?
  2. BOE (Bank of England) – is now seeing most anti-money printing hawks, capitulate to CTRL+Print
  3. Italian Banks – are now seeing “bank rescue” moneys from Italian Pension Funds

 

Macro market reaction to that?

 

  1. JAPAN - Yen Up +1.5%, Nikkei Down -1.4% (and remains in #crash mode, -21.7% from the #BeliefSystem 2015 high)
  2. UK – Pound Down -0.3%, FTSE +0.1% as the FTSE now has an inverse correlation of -0.78 to GBP/USD (3-month duration)
  3. ITALY – EUR/USD flat, MIB Index Down -1.8% (and remains in #crash mode, -31.9% from 2015 Global Equity #Bubble high)

 

Yeah, for people who have “no alternative to stocks” as a mantra, hopefully they’re not lying to you and suggesting that “stocks” no longer include Global Equities. Not that it matters to them, but June 24 was the biggest 1-day loss in Global Equity Market Cap, ever.

 

And ever, in truthful terms, remains a long time.

 

For a very long time, as long as I have been in this profession really (17 years), brokers and academics have tried to sell me on trailing returns instead of the draw-down risks associated with buying the peaks in those returns.

 

When some people read that, they’ll immediately call me something nasty… like a “market timer”… or maybe a wussy who isn’t willing to book gains before losing 20-70% of my hard earned money, every 5-7 years.

 

Oh well, there’s a lot of bull in the political market of calling people names, I guess.

 

But in all seriousness, if you have no idea on the timing of economic, profit, and credit cycle risks (early-cycle, mid-cycle, late-cycle), Buy- And-Hold in something you really believe in makes a lot of sense. I don’t “trade” my Hedgeye Equity, for example.

 

If you don’t do any rate-of-change analysis, you’d never care about “buying opportunities”, right? As long as you had “flows” (other people’s money), you’d just buyem’, every day, month, and year, no matter what the price. And eventually, #drink heavily.

 

Don’t do that.

 

And I’m not telling you to chase charts and just “buy, buy, buy” in many of the things we’ve liked for the past year either:

 

  1. Long-term Government Bonds continue to signal immediate-term overbought
  2. Municipal Bonds (MUB) have had a heck of a move and aren’t where I’d buy more yet either
  3. Utilities (XLU) are signaling the same at +22% YTD

 

You see, I’m a little polarizing to the Old Wall because I go both ways. In its purest definition, I am a free-market liberal. I’m conservative and entrepreneurial. And I really don’t give a damn if I’m not nailing everything all of the time, at all-time highs.

 

When I look at my world of investing opportunities, I don’t think there’s ever been a time in my life when I’ve been so excited. Whether it’s investing in Malaysian Equities (EWM) or big cap, low-beta, Energy Stocks (OXY) with safe-yields, there’s so much to do on sales.

 

One of the most exciting things of all is watching bubbles balloon up into the skies of a #BeliefSystem that is starting to go bad. Looking back, there have been so many epic buying opportunities born out of bubbles imploding that I can hardly wait for the next one.

 

When they don’t wish, they will liquidate. As a long-term investor, I have plenty of patience to wait pleasurably for that!

 

Our immediate-term Global Macro Risk Ranges are now:

 

UST 10yr Yield 1.46-1.63%

SPX 2129-2179

Nikkei 150

VIX 11.72-16.69
USD 96.31-97.99
YEN 103.15-107.31
Oil (WTI) 42.28-45.13

Gold 1311-1354

 

Best of luck out there today,

KM

 

Keith R. McCullough
Chief Executive Officer

 

Liquidate Pleasurably - 07.26.16 chart


Helicopters down and bank bailouts not resonating?

Client Talking Points

Japan

Heli-Ben IV ran out of fuel overnight – Yen ramped +1.5% to $104.23 and the Nikkei resumed its crash, closing down -1.4% to -21.6% from the Global Equity #Bubble high of 2015. Reiterating the short on Japanese Equities; fighting the BOJ continues to work as the #BeliefSystem continues to break-down.

Italy

“so”… ze pension funds of Italy are going to provide around 500M Euros in ze “bank rescue” money… cool – remember when Hank Paulson realized he needed a bigger bazooka (and it scared markets instead of propping them up?); Italy’s stock market smoked another -1.8% on the “news”, taking its crash to -31.7% from 2015 Global Equity high.

Oil

Complete amnesia required for the Dollar Down, Oil up, Earnings “have bottomed” narrative … Oil down another -1% WTI this am signals immediate-term TRADE oversold, but this remains a bearish TREND call @Hedgeye vs. Long Gold.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/25/16 67% 0% 3% 10% 12% 8%
7/26/16 64% 2% 4% 12% 10% 8%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
7/25/16 67% 0% 9% 30% 36% 24%
7/26/16 64% 6% 12% 36% 30% 24%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

Top Long Ideas

Company Ticker Sector Duration
GLD

Gold (GLD) = Protection from global currency devaluation and inflation/down USD – You can travel anywhere on earth and get a quote in local currency.

TLT

Long Bonds (TLT) = #GrowthSlowing, yield curve compression.

TIP

Treasury Inflation-Protected Securities (TIP) = Combination of the above exposures.

Three for the Road

TWEET OF THE DAY

FLASHBACK | $WAB: Adding Short Wabtec To Best Ideas List app.hedgeye.com/insights/52587… via @HedgeyeIndstrls pic.twitter.com/AaupJ2ER6s

@Hedgeye

QUOTE OF THE DAY

“Success is not final, failure is not fatal: it is the courage to continue that counts.”

-Winston Churchill

STAT OF THE DAY

Mark Teixeira is batting .184 this season.  


Early Look

daily macro intelligence

Relied upon by big institutional and individual investors across the world, this granular morning newsletter distills the latest and most vital market developments and insures that you are always in the know.

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