“The light turned green. I hit the gas.”
- Matthew McConaughey
Whether your name was McConaughey telling tales about Greenlights or Cathie telling stories about growth stocks, the months of NOV-FEB were fantastic for you! Matthew’s book raced up the Best Sellers lists and oh did the stories from The ARKK flow.
Now, the Irishman from Texas seems to be doing just fine. Cathie’s stocks, not so much.
The best part about The Mother of All #Quad2’s is that it gives birth to sensational storytellers. While I believe most of what McConaughey wrote, I don’t own his stock. Believing everything Cathie says is an entirely different risk management exercise.
Back to the Global Macro Grind…
Before a very small percentage of you cancel, this note has nothing to do with Matthew or Cathie as people. It has everything to do with being exposed to things that may or may not be true in #Quad2.
Post yesterday’s abrupt -1% correction from the prior day’s all-time closing SPY high, what’s true?
A) It’s a Dollar Down #Quad2 morning in FX
B) It’s a Rates Up #Quad2 morning in Global Rates
C) It’s a Story/Growth Stocks Down morning in America
So, if A) and B) are still true what are some of your friends and newly minted day-traders who have no idea about FX/Rates markets panicking about? A: They’re probably long some Space Ticker (SPCE) like Virgin Galactic:
A) That stock peaked when storytelling did in FEB at $60/share… and
B) Is down -70% since, pre getting pounded another -15% on reporting reality this morning
I know that stock too well because I have too many friends who have had “tickets” to fly to wherever on it for too long. And that is all I have to say about that. There is no SPCE in The Quads.
More importantly, how about the big story stocks that actually have told true stories (like APPL or AMZN)?
A) Both of those stocks broke @Hedgeye TREND support yesterday… and
B) Both of those stocks are massive components of widely held US Equity Sector ETFs
Whether or not the AAPL and AMZN immediate-term TRADE and TREND breakdowns hold this morning is for the market to decide. But why would I buy the damn dips in either of those ETFs (Consumer Discretionary, XLY, or Tech, XLK) if I don’t have to?
Fortuitously, on signals from Floki and my Fractal market gods, I actually sent out Sell Signals on both NASDAQ (QQQ) and Semis (SMH) on green on Friday. So I don’t have to deal with that baggage in the MFO (Mucker Family Office) this AM either.
Since it’s a Dollar Up, Rates Up morning ahead of US inflation data tomorrow, I’ll:
A) Stay put with my 4 Horsemen = Long Financials (XLF), Industrials (XLI), Materials (XLB), and Energy (XLE)…
B) And keep shorting both the Long Bond (TLT) and Gold (GLD)
Oh no you didn’t, you didn’t say SELL Gold for the umpteenth time since SEP 2020 after it went green for a week, did you? The Gold Bugs are as triggered by my position on their precious HODL as someone who is still long TSLA or ARKK (I have sell signals on both).
Admittedly, I like to trigger people. How triggering is it to wake up to a @Hedgeye Bitcoin Tracker product this morning that is signaling Bearish @Hedgeye TREND on some Blockchain ETF thing called the Amplify Transformational Data Sharing ETF (BLOK)?
A) Triggering myself? I was long the bloody thing alongside the Maestro (MSTR) until April … and
B) It’s been a great way to be extra-long anything Bitcoin/Crypto storytelling since #Quad2 hit in NOV 2020
Why was BLOK signaling get-out but Bitcoin signaling get-in? I really don’t care why, but one simple answer could be that BLOK is bunch of stories about stocks (that may or may not be true) and Bitcoin is another story about something that isn’t a stock…
Yes, that Bitcoin story is much more believable in #Quad2 than it is in #Quad4. And no, I’m not “making the #Quad4 call” on FX, Rates, and European Equities (buying more of those today)… because there is nothing signaling that I should do so on those fronts.
When the Hedgeye Signal light turns yellow on a story stock, don’t hit the gas.
Immediate-term @Hedgeye Risk Range with TREND signal in brackets:
UST 10yr Yield 1.57-1.72% (bullish)
SPX 4137-4233 (bullish)
RUT 2192-2314 (bullish)
NASDAQ 13,236-14,228 (neutral)
Tech (XLK) 133.54-142.72 (neutral)
Energy (XLE) 50.02-54.61 (bullish)
Financials (XLF) 35.84-38.20 (bullish)
Shanghai Comp 3 (bearish)
DAX 143 (bullish)
VIX 16.05-20.63 (bearish)
USD 89.90-91.20 (bearish)
Gold 1 (bearish)
Copper 4.55-4.80 (bullish)
AAPL 124-131 (bearish)
AMZN 3061-3350 (bearish)
TSLA 609-690 (bearish)
Bitcoin 53,079-60,001 (bullish)
Best of luck out there today,
KM
Keith R. McCullough
Chief Executive Officer
