“FOMO is the enemy of valuing your own time.”
- Andrew Yang
I know, I know. Yang is a Gen-X Democrat running for Mayor of New York City. Please don’t cancel.
I’m proud to be neither a Democrat nor a Republican. Doing my job is easier being apolitical and data-driven. Especially in an age of so many people chasing their “feelings” in markets, it’s been a big competitive advantage post the election.
The reason why I used Yang’s quote is A) it’s a good one and B) it’s the opening volley Patrick McGinnis uses in chapter 1 of his book Fear of Missing Out – Practical Decision Marking In a World of Overwhelming Choice. Are you fading your FOMO?
Back to the Global Macro Grind…
There isn’t much #process in selling last week’s lows and then chasing yesterday’s highs. When Q1 of 2021 is over, we’ll see what bodies float to the surface. We’ll also see many of you post some excellent #Quad2 performance results.
How do I fade my feelings?
A) I sell-SOME at the top-end of my Risk Ranges … and
B) I buy-MORE at the low-end of my Risk Ranges
I “touch” my portfolios more than I ever have before because A) I continue to get episodic-and-non-TRENDING moves in US Equity market volatility and B) commission-FREE trading lowers the cost of playing The Game as aggressively as I can.
How aggressive you are is obviously up to you. I don’t think that’s what is going to win/lose your month, quarter, or year. Getting the TRENDING Signals, Pods (rate of change of Revenues, Cash Flows, etc.) and economic Quads will.
Oh, does that make Mucker a “TREND” follower? A: Nope. I’m a TREND front-runner.
That’s right. You are too. You aren’t some silly dude or dudette who wakes up every morning reading an Old Wall Journal and/or CNBC’s rear-view looking tweets and talking points of the day – no one earns premium fees and/or returns doing that.
Look at this morning’s color on the screen (red) and the #1 Bloomberg “Story” at the top of their website:
“WALL STREET BULLISHNESS IS BECOMING A CONTRARIAN SELL SIGNAL”
Huh? The next clickbait down is another article about “bubbles”… and after that I just stopped scanning what that website page really has become in this day and age, one of THE contrarian signals in and of itself.
How much time do you waste in your day being triggered by Old Wall talking points?
I agree with Yang – that’s public enemy #1 to valuing your own time. Professionally, all of my incremental time is spent on evolving and improving our decision-making and risk management #process.
So what are we going to do today? Well, that’s easy – we’re going to proactively prepare for the next leg down in the US Dollar. If both the Signal & Quad remain right on that front, that will help us front-run the next leg higher in Commodities.
Yeah, they can call me a dirty little mother Mucker “trader” or whatever, reality is that I’m probably the longest-term Full Cycle Investor who publishes his every move and thought in the short-term! Don’t forget we:
A) Went Bearish @Hedgeye TREND on the US Dollar in June of 2020 (after being Bullish on it from Q2 of 2018)… and
B) Went Bullish @Hedgeye TREND on China, Commodities, EM, etc. in JUN of 2020 as well
Seems like a long-term-ago to me, eh? As of late, the real contrarian Signal & Quad “calls” of 2021 have been:
A) Our view that long-term Interest Rates (globally) would breakout to the upside in the 1st half of 2021 … and
B) Gold and Gold Mining Stocks (GDX) would probably crash from their Cycle Peaks
Yeah, the word “crash” triggers some people (when they’re Perma Bull marketing Gold for fees), but A) Gold is a currency B) Currency Crashes are drops of -10% or more and C) Gold’s crash is currently -18% from its #Quad3 Cycle Peak in AUG of 2020.
Back to stocks, as you can see in today’s Chart of The Day (CFTC futures & options positioning):
A) There are consensus net SHORT positions in SPY, Dow, QQQ, and the Russell 2000…
B) Therefore you’d have done the opposite of the Bloomberg headline last week and bought the damn dip
“Contrarian” positions in the US Equity market were the ones that worked again yesterday like:
A) Long of HIGH SHORT INTEREST stocks which were +2.3% on the day to +11.5% in the last month
B) Long of HIGH BETA stocks which were up another +2.5% on the day to +15.7% in the last month
Consider the alternative consensus positions:
A) Long of LOW BETA “High Quality” stocks which were +1.4% on the day and DOWN -0.9% in the last month or
B) Long of LARGE CAP stocks which were +2.2% on the day to only +5.5% in the last month
MANY (yes, going ALL CAPS on that) in the consensus DEFLATION, Low Risk, universe are long of AAPL, AMZN, etc. They’re in these positions because they had FOMO and chased them, as they were chasing Gold, into their relative safety zone highs of AUG 2020.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.26-1.55% (bullish)
SPX 3 (bullish)
RUT 2195-2305 (bullish)
NASDAQ 13,012-14,135 (bullish)
Energy (XLE) 45.13-51.11 (bullish)
Financials (XLF) 31.54-33.82 (bullish)
Utilities (XLU) 58.01-61.00 (bearish)
Gold Miners (GDX) 30.52-33.99 (bearish)
VIX 18.43-28.98 (bearish)
USD 89.70-91.25 (bearish)
Oil (WTI) 58.88-63.99 (bullish)
Gold 1 (bearish)
Copper 3.88-4.40 (bullish)
AAPL 119-132 (bearish)
AMZN 3017-3221 (bearish)
Bitcoin 46,107-54,688 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
