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Below is a chart and brief excerpt from today's Early Look written by Hedgeye CEO Keith McCullough.

Since LIQUIDITY and LEVERAGE are going to be causal factors during the next US stock market crash, you should absolutely respect those risk management Factor Exposures.

That said, confusing a small group of fund managers seeing their performance crash with The Cycle crashing has been a mistake.

Where is this IMPLIED VOLATILITY of > +40% that your data-driven process tweets of?

A) SPY’s Implied Volatility just ramped to a  +61% PREMIUM vs. 30-day realized (vs. a -16% DISCOUNT only 1-month ago)
B) IWM’s Implied Volatility just ramped to a +39% PREMIUM vs. 30-day realized (vs. a -19% DISCOUNT only 1-month ago)

And what was happening 1-month ago to generate those complacency (bulls chasing) & capitulation (shorts covering) signals (i.e. double-digit IMPLIED VOL DISCOUNTS)? A: 10 all-time closing SPY highs in the month of April.

CHART OF THE DAY: Implied Volatility Trends - ivol