CLIENT TALKING POINTS

Japan

The central-market-planning + Big Fiscal Helicopter #BeliefSystem (i.e. hope) took another blow overnight with the Nikkei down another -1.9% = down -3.5% since the 28.1T “stimulus” was approved; Nikkei -23.1% from 2015s high.

Oil

Every time I refresh my immediate-term risk range model (price/volume/volatility) I get a lower-high and a lower-low; currently that risk range for WTI = $38.71-42.24 with bearish TREND overhead at $47.55; how does this problem go away?

VIX

Buying front-month equity volatility has been a layup whenever you’ve had the chance < 12 going all the way back to the summer of 2014 when cross-asset-volatility put in an all-time low; it’s not different this time.

TOP LONG IDEAS

GLD

GLD

To summarize our active ideas, long Gold (GLD) and long U.S. Dollar position (via PowerShares DB US Dollar Index Bullish Fund (UUP), netted out Friday, with gold catching a bid against a USD that got crushed on the report. (Part of the reason we added UUP to Investing Ideas was the expectation of a GDP print that may have sent a hawkish message to the market.) Think of Gold and the USD as a position against a basket of other currencies.

TLT

TLT

The good news for #GrowthSlowing bulls is that the Treasury rate curve will likely get pushed lower over the coming days as investors take stock of this week’s ugly data. That's good for Treasury Inflation-Protected Securities (TIP) and Long Bonds (TLT).

UUP

UUP

See update on GLD.

Asset Allocation

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
8/2/16 60% 3% 5% 6% 13% 13%
8/3/16 57% 5% 6% 6% 13% 13%

Asset Allocation as a % of Max Preferred Exposure

CASH US EQUITIES INTL EQUITIES COMMODITIES FIXED INCOME INTL CURRENCIES
8/2/16 60% 9% 15% 18% 39% 39%
8/3/16 57% 15% 18% 18% 39% 39%
The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other assets classes is 33%.

THREE FOR THE ROAD

TWEET OF THE DAY

[UNLOCKED] Fund Flow Survey | Another Week Of Record Outflows app.hedgeye.com/insights/52813… cc @KeithMcCullough pic.twitter.com/fGkI8QYceP

@Hedgeye

QUOTE OF THE DAY

” Losers quit when they’re tired. Winners quit when they’ve won.” 

–Unknown

STAT OF THE DAY

Greg Maddux had 109 complete games over his 23 year career.