"With respect to our favorite factor exposure on the long side across all of global macro (i.e. large-cap U.S. Tech stocks)," writes Hedgeye Senior Macro analyst Darius Dale in today's Early Look, there were "some interesting callouts this morning that help strengthen our conviction that the ongoing -5.3% correction in the QQQ’s is just that – a correction and not the start of a new trend lower." Here's one of those key takeaways:
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"The 6-month term structure on the QQQ ETF is now in backwardation, which means that front-month implied volatility is higher than implied volatility on a contract that expires in six months. Historically, this has provided a powerful buy-the-dip signal for this exposure. Refer to the Chart of the Day below for more details." |
If you believe, as we do, the U.S. economy is accelerating then it makes sense to be long "Large Caps, Growth Stocks & Tech." Or as Dale writes, "Fade consensus or chase consensus? You tell me which one is the better long-term risk management strategy..."
