Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.

Textbook bounce in a lot of big things macro this morning after signaling immediate-term TRADE #oversold yesterday…

  1. OVERSOLD – is as oversold does – from the UST 10yr Yield to GBP/USD to Russian Stocks (+3.2% this morning) and Commodities (CRB Index), they all signaled oversold (low-end of my Risk Ranges) yesterday, so I covered all my RTA Shorts on that and went net long again (for a trade), buying both Consumer Staples (XLP) and Low Vol Equities (SPLV) on that too – not wild and crazy long, just executing on the process.
  2. VIX – why I’d cover my US Equity Shorts and buy one of the few Bullish @Hedgeye TREND signals (XLP) is pretty straightforward – front-month vol of vol signaled immediate-term TRADE overbought at VIX 48-49 and the implied vol discount on SPY moved 1200 basis points from where it was complacently priced on Friday’s Pump close; immediate-term downside in VIX to 36.17, not sure we’ll get that, but… open minded!

CHART OF THE DAY: Textbook Selloff Signal - Chart of the Day