“What if the earth had been flat or square?”
- Annie Duke
What if it was #Quad3 this morning? A: Gold wouldn’t be down another -1.2% taking its drawdown from its #Quad3 Cycle Peak in AUG 2020 to -13.7%. Utes (XLU) wouldn’t have been red again yesterday either.
At least the “Other Quad” questions we get are within the realm of reasonable. The zero edge EOTW (end of the world) scribblings and Scary, As a Service videos/newsletters about armageddon are both counterfactual and touristy.
As Annie explains about the counterfactual crowd, they are about improbable what ifs – “a possible outcome of a decision that is not the one that actually occurred – an imagined, hypothetical, state of the world.” -How To Decide, pg 59
Back to the Global Macro Grind…
Fortunately, thanks to all of you and the growth of #HedgeyeNation, I have less and less time to pay attention to counterfactual narratives and Old Wall media talking points. They’re simply distractions.
So let’s just do our job this morning and spend our remaining precious-life-time wisely. What if it wasn’t Quad2?
A) US GDP growth wouldn’t be #accelerating
B) US Inflation wouldn’t be #accelerating
C) US Corporate Profits wouldn’t be #accelerating
What’s the latest (factual) data on ABC?
A) ISM Services (in our GDP nowcast) #accelerated to 58.7 in JAN vs. 57.7 in DEC
B) The CRB Commodities Index, Oil, and Corn are inflating to fresh new Cycle Highs this AM
C) Aggregate SP500 Earnings have #accelerated to +5.5% year-over-year growth this AM
What’s the latest (factual) market pricing of ABC?
A) Both NASDAQ and the Russell 2000 ramped right back towards their all-time highs yesterday
B) UST 10yr Yield clocked a new Cycle High of 1.16% intraday post the ISM news (Gold straight down)
C) What should be widely owned Google (GOOGL) went vertical post its EPS report
What if GOOGL’s Pod 1 Revenue Growth didn’t #accelerate to +45% year-over-year growth? A: whoever “de-grossed” their position in the name at last week’s #oversold US stock market lows would have looked like a bloody genius.
“What if humans had become extinct during the last Ice Age?”
- Annie Duke
I get it, they’re all “smart.” Certainly on paper, most of them are a lot smarter than me. Those are facts too. My lowest SAT score @Yale was #timestamped!
But what about Street Smarts? Last I checked you don’t get to charge a premium asset management fee for having counterfactual returns and monthly drawdowns that make the one Gold is having look like alpha generation.
Stay with the data-driven and emotionless process. Numbers lead narratives. It’s not the other way around.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.07-1.17% (bullish)
SPX 3 (bullish)
RUT 2087-2199 (bullish)
NASDAQ 13,171-13,842 (bullish)
Tech (XLK) 130.01-135.74 (bullish)
Energy (XLE) 38.62-43.71 (bullish)
Utilities (XLU) 61.44-64.08 (bearish)
Gold Miners (GDX) 33.62-36.01 (bearish)
VIX 17.21-32.30 (bearish)
USD 89.75-91.40 (bearish)
Oil (WTI) 51.98-56.64 (bullish)
Gold 1 (bearish)
Silver 25.21-28.91 (bullish)
MSFT 233-246 (bullish)
GOOGL 1 (bullish)
Bitcoin 31,607-39,059 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
