“Style is knowing who you are, what you want to say, and not giving a damn.”
- Gore Vidal
That’s a great quote from one of the greatest life-books I’ve ever listened to on Audible: Greenlights, by The 51 year-old American Irishman from Uvalde, Texas, Matthew McConaughey.
I don’t think this book will resonate with someone like it did with me unless they’re around my age or older. Like Vidal’s quote, knowing who you are and what you want to say requires some experience, time, and space.
So, without apologies, I’ll say it this morning. Sell-SOME stocks. Or, if you so please, sell a LOT of stocks. Especially if you’re back at it, short selling Rate Sensitivity like Utes (XLU) and Staples (XLP), short-sell those with impunity.
Back to the Global Macro Grind…
What’s the difference between buying the damn dips on this day of last week and selling the rips both yesterday and on the open this morning? A: experience, time, and space.
I definitely don’t have all of the answers. And wow, do I have a LOT of #timestamped mistakes. But, what I do have, is my decision making #process… and a LOT of reps both executing on it and evolving it.
One answer I do have about life in markets is the secret to the universe. Yep, God put me on this good Earth to realize that it’s not the qualitative “valuation” opinions of men and women on ye Olde Wall – it’s calculus!
So why sell-SOME of that gross long exposure that you re-grossed last week? Why tighten your nets?
Nets? I’m not talking about fish or tickling the twine against the Smiths Falls Bears outside the chocolate (now turned pot) factory in my Canadian Junior Hockey League days. No, no, no. I’m talking tightening my NET exposure!
Ok, how do you do that?
A) My MAX net Long in Real-Time Alerts was 21-1 (as in 21 longs and 1 short with the 1 short being Gold)
B) Yesterday I tightened that up to 14 longs and 12 shorts, and I liked it
No, no, no. Don’t go there now. RTA is not a portfolio.
It’s a Fractal Signaling Tool that helps you see what I see, when I see it. It’s all about what’s happening on the margin. The Rate of Change. And that’s the thing about the universe, it’s non-linear, beautiful, and surprising.
I’ve been hearing Old Wall people talk about this “non-linear move” in the Bond Market like it “surprised everyone”… but why? Why are these people surprised about being surprised? That’s what markets do…
Like your emotions, at first they move slowly, then they move all at once. It’s like being in your car at a red light. It eventually goes green – and there you go. Onto the next destination of your experience with time and space.
While last week’s SPY and IWM Signals were buy the damn dip signals, or greenlights, this morning they are yellow lights:
A) SP500 signaling its 1st lower-high of 2021 with the top-end of my Risk Range = 3919
B) Russell 2000 signaling its 1st lower-high of 2021 with the top-end of my Risk Range = 2279
By lower-highs, I’m talking vs. the all-time closing highs of 3934 (SPX) and 2299 (Russell), eh. As a reminder, the 1st lower-high the market Gods gave me and Floki for the NASDAQ came on FEB 24th. The Vikings and I got the one on TSLA before that.
Could the NASDAQ all-time closing high of 14,095 on FEB 12th have been “the top” that so many linear-people have been “calling” for since our #Quad2 breakout call for long-term Interest Rates back in November? I don’t know.
If you didn’t know that this day in the year 2000 was THE DAY the NASDAQ peaked at 5048, now you know that, at least.
As I’ve explained since writing Diary of a Hedge Fund Manager with Rich Blake back in 2010, “calling” tops and bottoms is a fools game. Full Investing Cycle tops and bottoms playing out are processes, not “valuation” points in time.
In my risk management process, lower-highs (from the all-time highs) can be signaling 1 of 2 things:
A) Short-term consolidation of recent gains to a series of higher-lows and lower-highs… or
B) The end of the current Quad as The Cycle knows it
Now, if I changed that to the end of the world, I might become a “Beacon”, able to raise a $3B SPAC for my financial “research” company. But that’s not who I am or who I want to be.
For the remaining days that my God gives me to play The Game, I’ll have a lot more fun doing things my way, trying to get the bloody market timing thing right.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.38-1.63% (bullish)
SPX 3 (bullish)
RUT 2134-2279 (bullish)
NASDAQ 12,485-13,340 (neutral)
Tech (XLK) 124.23-131.93 (neutral)
Energy (XLE) 47.91-53.92 (bullish)
Financials (XLF) 32.30-34.45 (bullish)
Utilities (XLU) 57.75-61.46 (bearish)
Shanghai Comp 3 (bearish)
VIX 21.28-30.15 (bearish)
USD 89.75-92.60 (bearish)
Oil (WTI) 60.11-66.95 (bullish)
Gold 1 (bearish)
Copper 3.93-4.30 (bullish)
Silver 24.53-27.90 (bearish)
TSLA 552-705 (bearish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
