“This is my sanctuary, right here.”
- Coach Boone
Remember The Titans? That was my favorite movie of the year 2000 too. As a Coach, I’ll always remember when Coach Boone (Denzel Washington) walked onto the freshly cut grass of the stadium…
“Mmm. Yeah, this is my sanctuary right here…
All this hatred and turmoil swirling around us.
But this… this is always right.”
Back to the Global Macro Grind…
My sanctuary since the lock-down started has been Hedgeye HQ in Stamford, CT. Every day I’ve been blessed to have two-feet on the floor at the top of the risk management morning. I make my coffee. I take my new partner (Boomer) outside for a few, then I grind…
By 7:30AM this note is sent to you. At 7:45AM The Call (new product @Hedgeye) is #on with my analyst team. By 8:15AM I’m in the car. By 8:30AM I’m in the office. At 9AM it’s the Macro Show LIVE @HedgeyeTV. At 9:30AM I start trading.
Yep, my first love in this game – trading. I absolutely love it. Trading commission-free has never been so right.
I guess that’s unique about me as a strategist. We’re all unique in this good life, aren’t we? Coach Boone wasn’t trying to be Coach Yoast in Remember The Titans inasmuch as Gary Bertier wasn’t trying to be Julius Campbell. My Mom & Dad taught me to always be comfortable being myself.
Don’t worry, I’m not giving you a life-speech this morning. I’m actually trading President Pump’s from last night!
Here are the Top 3 Things (I send those out to premium Institutional Clients by 6AM, daily, too):
I got net long US Equities (for a trade) into the Pump presser last night – man does he deliver! #tremendous
- SPY – covering shorts (again) was A) a function of US “stocks” being down for the 3rd day in 4 (down on the open yesterday) and B) knowing Pump would re-open the FOMO last night with C) runway of at least 100 SPY handles towards the top-end of my @Hedgeye Risk Range – might sound ridiculous, but I have no interest in sounding intellectual about this – I just want to make money
- OIL – my short-term (for a trade) risk in being net Long Equities is that people actually pay attention to the fact that the rest of Global Macro markets didn’t care about the Pump presser at all! Oil resumes its Deep #Quad4 Crash this morning with WTI down over -8% taking the CRB Commodities Index to new cycle lows
- 10YR – Treasuries didn’t budge (neither did the Dollar) during the “re-opening” of his “Phases” and Equity FOMO (UST 10yr = 0.62%), so that sucks because I was selling down some of my Long Duration (EDV and TLT) positions on green yesterday, and now I need to buy those back… but Treasury Bond Bulls were smart enough to stay with The Cycle (not giving me a good re-entry price!) vs. The Pump
“Oh, of course you did”… “yeah, paper trader, you suck”… “try doing that at a real hedge fund, like mine”…
I hear it all, but it won’t change me. Being in my sanctuary is quite like playing in front of a packed barn in Pembroke, Ontario (where I played my Canadian Junior Hockey, for the Lumber Kings) or at the Yale Whale.
I could always hear the crowd, but I never quite listened to it. That’s what being inside your process is all about. #focus
I’m not here to tell you I actually believe everything Pump was pumping last night. I have no interest in making sense of anyone’s political argument about it either. I was simply front-running his proactively predictable behavior and the FOMO towards the top-end of my range.
What is it about this FOMO anyway? Again, Remember The Top in 2000!
And I didn’t quite have a keen appreciation for that historical reminder until I went back to that all-time bubble high and re-examined consensus behavior on the initial big bounces. It takes more than 2 months to change what bubble bulls need or want to believe.
I don’t dislike bubbles. Without them, I’d never have been able to play this game successfully or start Hedgeye for that matter.
What’s most interesting about the stock market bubble that peaked in FEB of 2020 (yeah, I know, the NASDAQ is “almost up YTD”, but its still down -13.1% from the peak, don’t forget) is that no one calling “the bottom” now called it a bubble way back then.
“All right now, I don't want them to gain another yard! You BLITZ ALL NIGHT! If they cross the line of scrimmage, I'll take every last one of you out! You make sure they remember FOREVER the night they played the Titans!” -Coach Yoast
‘And, Coach Boone, run that play. Don’t do what they’re expecting you do to – run your play.’
Yep, personally I’m long “stahks” (even GILD, which was lucky given I have no analyst covering it, hence no RTA and I can trade it personally when we have no analyst view) coming into the open but don’t expect me to be where you think I might by come Monday morning.
Always remember where markets are within their Risk Ranges… and I will always remember how to trade bursting bubbles.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 0.57-0.82% (bearish)
SPX 2 (bearish)
RUT 1133-1251 (bearish)
NASDAQ 7 (neutral)
Consumer Staples (XLP) 55.07-60.99 (bullish)
VIX 36.15-51.50 (bullish)
USD 98.71-101.15 (bullish)
Oil (WTI) 18.01-27.11 (bearish)
Gold 1647--1801 (bullish)
AMZN 2130-2451 (bullish)
FB 156-186 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
