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Below is a brief excerpt transcribed from Friday's edition of The Macro Show hosted by Hedgeye CEO Keith McCullough |
Today is the 2nd opportunity from a gross long exposure perspective to make the #Quad4 pivot.
Now some people will have a panic attack saying “well it’s now Quad 2” after they were just debating Quad 3 or 4.
I am going Quad 4. If people don’t like that, then they can do whatever they want to do.
But if you do believe it is Quad 4 probability rising like the data suggests, then you would be shorting Euro’s.
The last time it got to this level we shorted it at 1.18 on the screws. 1.185 is fine as well. I don’t think it would get there, but if it did, I’d short more.
Also, a big thing that has happened in Europe this week.
Wall Street did not talk about it because they were too busy navel-gazing and chasing tweets about the stimulus being on or off.
The big thing was that Germany’s economic data went deeper into Quad 4. We had the view that this was happening. The data showed not only that Germany was sliding into Quad 4 well before Q4.
German Bond Yields get that, as the German Bund Yield is currently down to -54% basis points. These bond markets around the world understand this, and that’s another opportunity to buy treasuries this morning in addition to riding the Quad 4 gains that you have in Utilities and REITs.
Just look at the chart below and you can see.
So short the Euro instead of any other currency this morning.
