“We love greenlights. They don’t interfere with our direction. They’re easy.”
- Matthew McConaughey
After 6 straight up days for the US stock market (to fresh all-time closing SPY highs) and new Cycle Highs for Commodities, Bitcoins, etc., both my inbox and Twitter mentions are filled with greenlights and #Quad2 joy. That was easy, eh?
Re-grossing into their de-grossing = #greenlights. “They say yes (Quad2) and give us what we want. Catching greenlights is about skill: intent, context, consideration, endurance, anticipation, resilience, speed, and discipline.” -Greenlights, pg 13
“Persist, pivot, or concede. It’s up to us, (our process) is our choice, every time.” Now don’t forget to sell-some!
Back to the Global Macro Grind…
As I get older and risk manage more cycles, The Game gets easier… but only when we’re winning. When we’re losing, there are more people watching, so there’s more whining. That’s human nature. For a lot of people in this good life, nothing is ever enough.
For me though, I don’t lose sleep over much. With 4 growing children at home, I’m too damn tired. God willing, all I can do at the top of each risk management morning is get my two feet on the floor, splash some water on my face, and meet the new day.
Today (and yesterday, all day) was a day to be selling.
Yep, as greenlights (low-end of my Risk Ranges) turn into yellow lights (top-end of my Risk Ranges), I de-gross and tighten up my net. Net Long exposure, that is.
What are you going to do today? What did you do yesterday?
Whatever you did, make the best probability-weighted decisions within the risk managed rules of your hard-earned #process and the beautifully new and interconnected data you’ve received.
#YellowLights? Here’s what I’m looking at:
- JAPAN – Nikkei +0.4% overnight signaling immediate-term TRADE #overbought (means top-end of my range)
- CHINA – Shanghai Comp +2.0% overnight signaling immediate-term TRADE #overbought
- KOSPI – down -0.2% overnight and down for the 2nd day in a row, losing some immediate-term TRADE momentum
- INDIA – down -0.1% overnight (day 1 of the correction) within its obvious Bullish #Quad2 @Hedgeye TREND
- LONDON – FTSE flat post SPY, IWM, QQQ all scoring all-time closing highs
- GERMANY – DAX corrects -0.5% from the top-end of its @Hedgeye Risk Range after signaling #overbought
- SPAIN – IBEX corrects another -1.0%, leading losers, globally, with a -3.3% correction in the last month
- RUSSIA – RTSI +0.1% with Oil (WTI) making another new Cycle High this morning (i.e. no correction yet)
- COMMODITIES – new Cycle High of 183 for the CRB Commodities Index signals immediate-term TRADE #overbought
- OIL – inflates another +0.5% to a new Cycle High of $58.27/barrel signaling #overboguht alongside Energy (XLE)
- CORN – inflates another +1.2% to a new Cycle High of $5.71, signaling immediate-term TRADE #overbought
- COPPER – inflates another +0.7% towards its prior Cycle High and the top-end of my Risk Range
- GOLD – +0.8% Counter @Hedgeye TREND bounce off the low-end of my Risk Range with Bond Yields correcting
- UST 10YR – yield down -3bps after signaling immediate-term TRADE #overbought at the top-end of my Yield Range
- USD – down -0.4-0.6% vs. the Majors after signaling immediate-term TRADE #overbought in the middle of last week
I can go on and on and on here, but my fingers are too arthritic after too many hockey and twitter fights. #RedLights that I’ve learned from. All of them, indeed.
And yes, it remains my coaching and leadership challenge to explain why I make the decisions I make. But, you know what? The honest truth is I don’t really care why as much as most people do. I care about doing, because that’s what I do.
I guess that’s why McConaughey’s book caught me in a particular way at a particular time in my life. Maybe it’s because we’re both Irish and the same age. Maybe it’s just because it’s how The Game goes…
I don’t care on the why part of that either. What I care most about was my team catching those #Quad2 Greenlights. It wasn’t that easy. But, when you catch them like that, don’t interfere with their direction until the next similar set of signals does.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.08-1.22% (bullish)
SPX 3 (bullish)
RUT 2158-2299 (bullish)
NASDAQ 13,312-14,122 (bullish)
Tech (XLK) 131.40-137.97 (bullish)
Energy (XLE) 38.47-45.09 (bullish)
Shanghai Comp 3 (bullish)
Nikkei 28141-29573 (bullish)
DAX 130 (bullish)
VIX 16.87-27.11 (bearish)
USD 89.92-91.54 (bearish)
USD/CHF 0.88-0.90 (bearish)
Oil (WTI) 52.76-58.77 (bullish)
Gold 1 (bearish)
Copper 3.50-3.71 (bullish)
Bitcoin 35,963-47,708 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
