“It was poetry, the bend of words to frame a cause…”
- Tim Egan
Yep, I’m still Irish. And I’m still buying the damn #Quad2 in Q2 dips.
The aforementioned quote comes from an Irish American Revolutionary #history book I enjoyed finishing during family vacation called the Immortal Irishman. It’s not about being Irish. It’s about being people of principle.
And so we fight for those #HedgeyeNation principles of Transparency, Accountability, and Trust (vs. the conflicts of ye Olde Wall and its compromised media) this morning. We grind and grind, executing on our apolitical and data-driven process.
Back to the Global Macro Grind…
Speaking of nations of people who refuse to accept the conflict-of-interest narratives of the establishment…
The Nation was “the most influential journal of 19th century Ireland. Though only 10,000 copies were printed each week, the paper was passed around 25 readers to an issue, and became the island’s first publication.” (pg 28)
Sadly (for The People who get sucked into their narratives), today’s “newsletter” business is largely built on both political biases and fear mongering. Fortunately, we can save and make a lot of money fading those narratives.
There’s poetry in this morning’s numbers vs. perma bear narratives:
A) There are still net SHORT positions in the SP500, Russell, and NASDAQ (CFTC futures & options positioning)
B) Implied Volatility on SPY just popped to a fearful +21% PREMIUM vs. 30-day realized volatility
The net SHORT position in the SP500 (Index + Emini) of -38,036 contracts (as of last week’s release) stands in sharp contrast to the Peak Cycle, or MAX (in the last 3 years) net LONG position in the same contracts of +245,514.
Indeed, Full Cycle Investors @Hedgeye will recall that point in both sentiment and Cycle Time, because all this Irish Canadian bloody well does in the morning is bean count numbers in sequence within the context of The Cycle’s Sine Curves.
On that score, I have some questions for you:
A) Have you been Bullish Enough this year?
B) Have you been Bullish Enough at the low-end of the Risk Ranges?
C) Have you been infected by Old Wall talking points and narratives?
It’s ok. You’re all human. While I don’t have chronic infection embedded in my decision-making process, I do get affected by those Macro Tourist talking points… because some subscribers ask me and my research teammates to confirm or deny them.
Life would be somewhat simpler, but a lot less fun, if I just sat here in silence, trading my own book…
And that would not be the life that gets me fired up to get two-feet on the floor at the top of the risk management morning trying to lead #HedgeyeNation into the next bid/ask battle!
What are the Top 3 Things jumping off the page in our team’s process this morning?
- US DOLLAR – after another Touristy headfake in March, USD continues to breakdown and remains Bearish TREND
- OIL (and Commodities broadly) – continue to breakout towards prior Cycle Highs and beyond
- VIX – continues to signal a series of lower Cycle Highs with the top end of my Vol of Vol range down to 17.99
To the bears, I say is that all ya got bearish nah—r-r-rah-tif newsletter-r-r lads? VIX in de high teeeens, eh?
May the road rise up to meet ya at the top of my SPY Risk Range again, eh. We’ve only registered 8 all-time closing SPY highs so far in April. Oh, and by the by, that’s not a see-cr-r-ret after 3 Mac-r-o Too-r-ists know it.
And oh, yes, lads and ladies of the bearish tilt, we have mo-r-r-r Bullish #Quad2 in Q2 catalysts this week:
A) EARNINGS SEASON: 10% of SP500 companies have reported aggregate year-over-year EPS growth of +86.5%
B) HOUSING REPORTS: Existing and New Home Sales (for March) will be reported later this week
So I ask you again, are you Bullish Enough when you buy these damn dips? We’ll all have to see, won’t we? Wherever you go and whatever you do, may the best of luck of the Irish be there with you.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.55-1.75% (bullish)
SPX 4115-4202 (bullish)
RUT 2 (bullish)
NASDAQ 13,687-14,124 (bullish)
Tech (XLK) 138.52-145.00 (bullish)
Energy (XLE) 47.43-51.41 (bullish)
Financials (XLF) 34.60-35.74 (bullish)
VIX 15.22-17.93 (bearish)
USD 90.86-91.99 (bearish)
EUR/USD 1.183-1.208 (bullish)
GBP/USD 1.371-1.403 (bullish)
Oil (WTI) 60.18-65.03 (bullish)
Gold 1 (bearish)
Copper 4.02-4.34 (bullish)
Bitcoin 54,226-65,494 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
