Don't Chase the SPY

08/30/19 11:32AM EDT

Below is a brief excerpt transcribed from today's edition of The Macro Show hosted by CEO Keith McCullough

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McCullough: Do you have the SPY FOMO? You’ve had four straight down weeks for the S&P 500, which hasn’t happened in a while. Then you get a third straight up day, at least in the futures. And I know that many of you have these questions reflecting this FOMO, that fear of missing out, that chasing, that visceral feeling you have when something goes up.

Not to ignore those things, but I did the math and I plugged in 15.18 at the low end of my risk range on the VIX which gives me a top end of the range on SPYs of 2952.

It’s just math, there's no emotion. There’s an implied volatility discount showing crazy complacency this morning of -28% in SPYs. 

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So if you don’t know what that is that’s okay. But it matters when it’s down 28 percent implied volatility versus what’s been realized in those last 30 days, that is actually one of the lowest readings for volatility in terms of where people are pricing risk in the future of the entire cycle. That’s a long time. This signal cannot get much lower. But that would certainly insulate a time stamping of the SPY here on the short side today while people have FOMO.

It's best to cut all the things that you are already long such as Utilities and REITs. Both hit all time highs yesterday along with Gold which made a 6 year high this week.

McCullough: I was talking this morning about silver on Twitter because a lot of people were asking me. Look at the chart!

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You could’ve bought the Russell 2000 last year at this time today. If you did it you’ll see what had happened. You lost 15% of your money if it's in your account. But if you bought Silver and Gold last year at this time, you would’ve done a heck of a lot better instead of banging your head against the wall because you were long the FANG. 

But why don’t you have them in ETF Pro, some of you might say? Well I put the big stuff and I’ll trade the other stuff in Real-Time Alerts. I have been crystal clear on being bullish on gold, silver, and platinum. You all know that.

But I want to use this to remind you what full cycle investing looks like. You don’t have to just buy stocks! 

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