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

Another way you can bet on NOT #Quad4 is to short Treasuries and BUY Junk Bonds (JNK):

  1. UST 2yr Yield was +2 basis points last week to a whopping +0.15%
  2. UST 10yr Yield was up +7 basis points last week to 0.77%
  3. HY OAS Spread compressed -41 basis points last week to +469bps over Treasuries

And… I was buying Treasuries (across the curve) and shorting Junk (JNK) all week long. Maybe I’m crazy, executing on the process and all, but I think this consensus net SHORT position of -422,712 contracts (futures & options) in 5yr Treasuries is crazier.

Crazy is as crazy does though. In the words of the most tremendous Pumper of stocks in US history, “believe me”, I get it!

This isn’t the first time I’ve been “early” calling for a #Quad4 (i.e. with consensus Wall Street positioning completely on the other side of me) and it certainly won’t be the last.

CHART OF THE DAY: Different Types Of Crazy - CoD 5Y TSY CFTC