Below is a complimentary edition of the Early Look written by Hedgeye CEO Keith McCullough.

“You can’t read the label while you’re inside the jar.”
-Southern Folks

How can one be bearish on growth (i.e. Long Treasuries) and bullish on Tech (XLK), at the same time?

“The notion that we can’t always understand what we’re too close to, sums up the relationship between psychology and neurobiology as forces of ecstasis.” -Stealing Fire, pg 95

Are you so close to “the market” that you thought it was all about US “stocks”? You didn’t think periods in US stock market history had anything to do with where the US economy was headed next, did you?

If the answers to those questions tweak you a little, that’s ok. That’s what I’m trying to do. It’s called Hedgeye Risk Management for a reason. One of my coaching goals is to have you question both your premise and your process.

Early Look: Long Tech & Treasuries #Reiterated - 07.30.2020 GDP plunge cartoon

Back to the Global Macro Grind…

“Being bearish” is something that some Old Wall stock-market-only people read as either being in Cash or “missing the rally”, or whatever – what they think doesn’t matter. What we do with our hard earned capital does.

If I wasn’t bearish on US Growth Slowing (since Q4 of 2018):

A) I wouldn’t have been long 2yr Treasuries from a 3.0% yield to a 0.1% yield this morning
B) I wouldn’t have been long 10yr Treasuries from a 3.25% yield to a 0.53% yield this morning
C) I wouldn’t have been long Gold from $1200 to $2000 (a +66% Full Investing Cycle return)

Being “bearish” on The ROC (rate of change) of Real US Growth peaking in Q3 of 2018 means I was either surgically shifting my Asset Allocations to either #Quad4 or #Quad3. Those are The Quads where Gold and Treasury Bond Bulls get paid.

Being “bearish” on the US Dollar since May of 2020 means being Bullish on Commodities, China, and Emerging Markets Equities too. I took down my Asset Allocation to Cash in #Quad4 and bought those things in June too.

Did I “miss” buying what has sucked royal wind for a head-fake #Quad2 V-shaped-recovery in April and May of 2020? Big time. And thank God for that. Imagine I shorted Treasuries and Gold in early June and bought the Financials (XLF)?

I get it. Not everyone does it this way. Alongside my fellow Full Cycle Investors, I am grateful for that.

I’m also humbled by the daily opportunity that Darius, Dr. Drake, Jonesy Buds, and I have to not only #educate, but motivate others to think differently about The Cycle too.

If you want to be beta, don’t challenge yourself. Just sleep in and pay 9.5 basis points to own SPY.

And miss the epic Full Cycle Investing return opportunity we’re realizing, without realizing losses from epic draw-downs and US stock market crashes, having to beg un-elected central-market-planners to get back to break-even.


Yes, your friends who think the “market” is just the SP500 know what the “year-to-date” return of the US stock market is (hint: after indebting America potentially beyond repair and lighting its hard earned Currency on fire – it’s ZERO).

God forbid those same friends at the golf or Fed fan club had you in “value” or Small Cap Stahks! The “year-to-date” return on the Russell 2000 isn’t ZERO, it’s DOWN -10%. Worse yet, the Financials (XLF) are still crashing at -22% YTD!

Why does being myopic about what the “market” is matter?

Because, despite their begging to socialize market risk, you still have a free market choice to A) not be Old Wall Beta, but B) be aware of when and why you’re compounding returns after preserving your capital as the crowd was losing theirs.

As always, my sincere thank you for taking the time to read and learn about our Full Investing Cycle #process.

Immediate-term @Hedgeye Risk Range with TREND signal in brackets:

UST 10yr Yield 0.51-0.61% (bearish)
UST 2yr Yield 0.10-0.15% (bearish)
SPX 3201-3282 (bullish)
RUT 1450-1506 (bearish)
NASDAQ 10,289-10,832 (bullish)
Tech (XLK) 104.38-110.57 (bullish)
Financials (XLF) 22.99-24.66 (bearish)
Shanghai Comp 3166-3390 (bullish)
VIX 23.46-30.55 (bearish)
USD 92.48-94.37 (bearish)
Oil (WTI) 39.47-42.40 (bullish)
Nat Gas 1.60-1.99 (bullish)
Gold 1902-2001 (bullish)
Copper 2.87-2.97 (bullish)
AAPL 372-410 (bullish)
AMZN 2955-3240 (bullish)
FB 224-250 (bullish)
GOOGL 1488-1581 (bullish)
Bitcoin 10,078-11,691 (bullish)

Best of luck out there today,


Keith R. McCullough
Chief Executive Officer

Early Look: Long Tech & Treasuries #Reiterated - Chart of the Day