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Below is a brief excerpt transcribed from Friday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough |
Yesterdays Federal Reserve meeting may have been the easiest I've ever analyzed since I started listening to Fed meetings 20 years ago.
What was amazing about it was the reaction. The Macro tourists panicked.
“Oh my gosh, what am I going to do?”
Why? All you should have done yesterday was short the Dollar, bought more Gold, and bought more Treasuries.
That’s very obvious.
Now if you look at the U.S. Dollar Index, you can see that we’re just getting started.
This is the new bear cycle for the Dollar along with the new bullish cycle for inflation.
The upside down of the Dollar right now is Gold, and it just keeps humming. It is also one of the things that has a very high inverse correlation to the dollar on a 15 and 30 day basis.
Look at the S&P 500 on this!
Something to notice is always the particular. And the particular thing to notice at this particular time is -0.33 and -0.63 on the 15 and 30 day basis.
That’s definitely not as good an inverse correlation as Gold!
Gold is -0.78 on a 30 day versus the U.S. Dollar.
Gold volatility fell towards 23 yesterday and the Fed said they were going to burn the dollar to as far as it can go.
No whining or crying at the low end of the Risk Range. Clip it and buy it.
That’s how you risk manage the Dollar and Gold.