“Let what you know guide you but not blind you.”
- Chris Voss
Especially in this business, everyone thinks they know something about something. And, believe them, they do. But not everything in their belief-system plays out on time in markets. Timing matters
The aforementioned quote comes from the end of a great #behavioral and risk management book I reviewed last year called Never Split The Difference. It’s from a chapter Voss called “Find The Black Swan.”
The thing about Black Swan “knowledge” is that they’re very hard to find. While I don’t lack credibility in calling market crashes, I prefer to let the known knowns within my team’s data-driven and apolitical #process drive my decisions.
Back to the Global Macro Grind…
“Every case is new, so remain flexible and adaptable.”- Chris Voss
Indeed, Voss Man. While Voss was a FBI hostage negotiator, I often feel like he and I have the same job. Don’t see the analogy? Empathize with me trying to answer to the Anxieties of The Day on The Macro Show @HedgeyeTV!
Since my teammates and I were blessed with a vision to create a real-time economic and market content platform where real people could ask me real questions on a pre-market open livewire, I got what I was asking for…
As our #Quad4 COVID Crash call (which I made at the end of JAN 2020) was playing out, ole Jonesy Buds (co-host Daryl Jones) and I were seeing our daily audience double, and double, and double…
That meant that the volume on the Anxieties of The Day was going higher, and higher, and higher...
Initially, I didn’t struggle with it because we were making a straightforward get the f out call. But once May and June rolled around and the pizza guy was telling people to buy stocks, wow, it was loud.
And it’s still getting louder, but in different ways. Every day is new, so I have to remain flexible and adaptable…
Coaching, based on the collective lessons of my life’s work (going on 22 years), is a LOT harder than executing on my process in my P.A. (where I don’t have to explain how, when, and why to shoot pucks).
In trying to coach, I need to “let what I know guide me”… but not be blind to everyone else’s blind spots.
That said, just because I take the “top questions” (our subscribers give questions “up” and “down” votes), doesn’t mean the questions are leading me to a place of unknowns that I need to explore deeply within my soul.
Old Wall & Zero Edge Talking Points often trigger people and lead to questions I’ll get. We obviously get some particularly well-timed questions within the context of the data and process information we provide pre-show as well.
One of the biggest fears on Thursday and Friday of last week was that there was “political risk” to the US stock market.
That fear A) made sense because a LOT of people have emotional and political biases, B) Equity markets (ex-Commodities, Russell 2000, etc.) were red (scary, eh?) and C) it was plainly priced into the futures and options markets with:
A) Net SHORT positions (non-commercial CFTC contracts) in both the SP500 and the Dow
B) In the case of XLY (loaded with AMZN) a +102% implied volatility PREMIUM vs. 30-day realized
In every negotiation with someone who is hostage to their fears, the setup matters – sometimes it matters big time. Clearly with implied vol PREMIUMS on SPY and QQQ running in the +70-99% range, I knew why I was getting their questions!
And now there will be crickets.
All-time, as I’ve always reminded people who are new to history and markets, is a really long time. And yesterday’s all-time closing highs for the SP500, NASDAQ, and Russell 2000 are history.
Did the crowd chase those highs? Big time. Total US Equity Volume (including dark pool) ramped to +36% vs. its 1-month average yesterday. They chased Asian Equities to new Cycle Highs last night too.
So now what? Every day is new. All of my risk management signals reset.
While I’ll review the MANY immediate-term @Hedgeye TRADE #overbought signals (SPY, QQQ, MSFT, AMZN, etc.) during The Macro Show’s Top 3 Things, the Anxiety of The Day will be #Bitcoin.
Why? It’s correcting from the top-end of its @Hedgeye Risk Range because that is what markets do.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.04-1.19% (bullish)
SPX 3 (bullish)
RUT 2110-2176 (bullish)
NASDAQ 12,885-13,595 (bullish)
Tech (XLK) 127.49-131.99 (bullish)
Shanghai Comp 3 (bullish)
Nikkei 275 (bullish)
VIX 20.58-24.99 (bearish)
USD 89.35-90.85 (bearish)
Oil (WTI) 51.00-54.29 (bullish)
Gold 1 (bearish)
Copper 3.56-3.72 (bullish)
Bitcoin 30,962-41,132 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
