“Our goal was to take a multidisciplinary approach to mapping the neurobiology of flow.”
- Steven Kotler
Notice how everything just flows better when the VIX pulls back below 31. The stock pics get awesome again! Whatever the narrative needs to be, it’s all good. Since we no longer have a “V-shaped recovery” the new V is for vaccine!
Don’t like altered narratives? The aforementioned quote comes from a good behavioral book I’m finishing called Stealing Fire. In Kotler’s Flow Genome Project, they are “studying the relationship between altered states and peak performance.”
“The people really good at finding flow, mostly artists and athletes, were rarely interested in studying it. And the people interested in studying flow, primarily academics, were rarely good at finding it”(pg 5). Then came President Pump.
Back to the Global Macro Grind…
Including the fine folks at Moderna (MRNA), who were unbelievably good at selling stock into their last “major development”, according to my behavioral back-test, there’s never been a President of the United States who was better at pumping stahks!
The man obviously has some insecurities, but he’s truly tremendous at pumping new stock market narratives.
If that one-liner made you angry at me, get in line. In the latest PEW Survey on the “feelings” of The American People, 71% said they are angry. While most of us are getting paid by Fed fueled asset inflation, only 17% of The People surveyed “felt” pride.
Setting aside the non-V-shaped US jobs recovery associated with all of our newfound wealth, are you proud about all of this?
I’m just asking for some friends who don’t own Treasuries, Tech, or Gold. Hopefully you have non-Wall-Street friends in your lives too. If they still have a job, they’re getting paid in Devalued Dollars. Sadly, their cost of living continues to rise in kind.
Which brings us to this morning’s Quad map:
A) INFLATION (US CPI): #accelerated, right on time, off it’s deflationary Cycle Lows yesterday
B) CHART OF THE DAY: shows you FOOD and MEDICAL cost of living exploding to the upside (+6% y/y)
With a non-recovery in the labor market and profits collapsing to new Cycle Lows, are we proud of this?
It’s early in Earnings Season, but here’s this morning’s Pod (Profit Cycle) map:
A) 24 of 500 SP500 companies have reported an aggregate year-over-year earnings depression of -32.8%
B) 4 of 65 FINANCIALS have reported an aggregate year-over-year earnings depression of -56.9%
And that’s with 1 of those 4 FINANCIALS being the mother ship (JP Morgan) of Banking Fees & Capital Markets (trading commissions) bailout windfalls reporting a “better than expected” (Old Wall headline) quarter at down -51% year-over-year earnings.
Imagine what Jamie Dimon would have reported if the Fed didn’t bail out both the US stock and high yield bond markets?
With loan loss reserves accelerating and net interest margins collapsing, what’s up next for US bank stocks in Q3? What if they don’t have any banking and/or trading fees from the Fed to chew on in the meantime?
Reiterating our SELL call on the Financials (XLF) this morning. They’re clearly in a bear market, and they should be.
But what about Stahks? Don’t forget what has a higher correlation to both US Equity Beta and Commodity Inflation than an alleged vaccine headline does – Pump’s US Dollar Devaluation story:
A) The 15-day inverse correlation between the US Dollar Index and the SP500 is currently -0.83
B) The 15-day inverse correlation between the US Dollar Index and the CRB Commodities Index is… drumroll… -0.83
Yeah, 15 days might be nothing to a longer-term Full Cycle Investor… but in 15 minutes, Pump can get almost anyone with feelings out there to believe they are feeling The Flow of this US stock market bubble, baby!
Unfortunately for him, the end of day Pump on #decelerating volume (yesterday’s US Equity Volume #decelerated -11% vs. Monday’s down day) for US stocks now has to deal with USD signaling immediate-term TRADE #oversold within its @Hedgeye Risk Range today.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 0.59-0.68% (bearish)
SPX 3101-3219 (bearish)
RUT 1 (bearish)
Tech (XLK) 103.34-109.12 (bullish)
REITS (XLRE) 34.02-36.01 (bullish)
Financials (XLF) 22.15-23.98 (bearish)
VIX 26.22-34.67 (bullish)
USD 95.90-97.12 (bearish)
Oil (WTI) 38.47-41.26 (bullish)
Gold 1 (bullish)
Copper 2.71-2.98 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
