Most wisdom isn't cheap.

Maybe, but never underestimate the capacity of Silver to disappoint as a precious metals trade.

silver has been a notorious widow maker as I can personally confirm...

I wouldn’t short in this vol market, if you want to be long on short, look at SQQQ ETF, it’s a short on NASDAQ, essentially tech stocks, and you don’t have to worry about the risks coming from shorting individual stocks.

Shorting stocks through buying PUTS? Of course in recent weeks that idea will have worked nicely i.e. pay a debit to open a position, option prices spike up in a big way (volatility up) then close the position at a higher price than you paid to open. However please be aware over the longer term do not get in the habit of buying options as a go to strategy as the mathematics of probability are overwhelming in favour of the option SELLER, the option buyer is dead meat in the long run.

Thanks guys for the great comments. do to my age and the low amount of my capital, I wanted to know if I could use the what they talked about in chapter 6 to grow my capital. love the idea of using SQQQ ETF to grow my capital on the way down for the short term days to months and then used the money I make to buy stocks for the long term as in years. I believe that there is leg down more and I might take the shoot. do you guys think its good position to take? or is my logic wrong?

Mohammed, your question leads me to suggest put a temporary stop to trading, investing right now as I'm firmly of the belief it's not possible to be consistently profitable if you're reliant on the directional views of others. A PhD in mathematics would define stock movement as a 'standard normal variable' i.e. over time nobody consistently can predict what will happen i.e placing a directional trade is no better than a 50:50 shot. The solution to becoming self sufficient in finding trades and incorporating multiple strategies in your playbook is to learn the Options Market. It takes about three months of daily study, not to become competent far from it, but purely for a light bulb moment to appreciate why at three months it's necessary to embark on full subject matter immersion study period for 12 to 18 months. During this period trade only very small positions finding options strategies you like. After 18 months start to ramp up frequency of trading until you have maybe 3000 trades completed over the next year to prove your system. To be successful you need to trade frequently e.g. 80 to 100 small positions per week minimum to allow the mathematics to play out in your favour. The prize at the end of all that work by the time your 25 you will no longer need expensive subscription services. This is possible if you attain the ability to interpret the movement in options prices i.e. option prices are informationally very efficient in identifying opportunities.

Open a Margin account, so that you have access to 'all the toys' including options, futures etc even if only able to put a very small amount of capital in it e.g. $2500 the learning process will be invaluable, and even with just 2500 it's possible to find sufficient instruments and option strategies, micro futures etc with small buying power requirements to make the process really worthwhile in the long run. To anyone that might think they don't won't or need margin facilities, well it's the Regulators that mandate Margin accounts only to access all available trading instruments and strategies.

I think he was referring to the "old wall street" brokerage houses.

Old Wall Street.

glass steagal and dodd frank are US finance Acts passed by Congress and signed into law- chk Wikipedia for details

https://www.investopedia.com/articles/analyst/090501.asp "A Chinese wall is an ethical concept of separation between groups, departments or individuals within the same organization – a virtual barrier that prohibits communications or exchanges of information that could cause conflicts of interest. While the Chinese-wall concept exists in a variety of industries and professions, from journalism to law to insurance, it's most often associated – and originated – with the financial services sector: investment banks, retail banks, and brokerages. U.S. historical milestones illustrate why a Chinese wall was needed in and why legislation was created to keep it in place."

https://app.hedgeye.com/world/terminology#old-wall

Sorry for my terrible typing. I meant to ask: “What is the ‘Old Wall’? Is he referring to Glass astragalus era division between commercial and investment banking?” Answers below suggest ‘Yes’ but tell me if not. Thanks!

ha, dude, he said exactly what to do. smh

What are you talking about? He said he'd short tech stocks. Hard to be more clear than that.

Would you prefer him sell you an online course? It's clear from his answer what he'd recommend you do.

I agree with everything you say with the exception of silver. I fear it has lost its monetary attraction and become a simple commodity (like copper did). Gold will never lose its alure but I fear Bitcoin has replaced silver for the retail buyer.

As soon as someone cracks the bitcoin encryption it will go to zero, only a question of time. Try this with silver and add a diminishing supply (at low costs), due to reducing mining yields (high grade deposits are always exploited 1st), US geological institute sees silver running out first and usage in electronics and solar with very low recovery rates from recycling.

7

One day is a grain of sand

He said he is shorting the bounces. I think his play would be to sell AFTER it's up 9%.

he did not advise you to short SP500 today. he even specifically mentioned you would have possibly ended up in the fuck bucket

For volatility I might recommend Nassim Nicholas Taleb's Incerto series, specifically Antifragile and Black Swan. He's also a big fan of Mandelbrot, whose book I have now transferred from bookshelf to nightstand.

Buck which are the best value RV and hedgeye subscription plans? RV is way too expensive for me (on the pro plan now; referring to the next plan where the meat is). Thanks

Rahul, As for RV I'd say the 1 year subscription that's around $450-$500 gives you a lot of access to RV interviews along with a variety of shows such as Jim Grant, Expert view, Grant Williams Going on The Road etc... As for Hedgeye the 1 year access for $350ish is well worth it. Includes Hedgeye TV Live and lots of great interviews with both Keith and Neil Howe (I recommend both there books too The Diary Of A Hedge Fund Manager (Keith) & The Forth Turning (Neil Howe) it will blow your mind. Best of luck man. Buck

Thank you Buck much appreciated. take care

Dear Buck, Very interesting thoughts. Wanted to more how you are becoming a Macro Trader, what and where to upgrading skill sets to become a Macro Trader. Am already a Plus user on Real Vision and am taking the hedge eye subscription too( do let me know whichever is good) Really look forward to some feedback on Macro Trading. Regards, Nakul Saxena nakulsaxena@live.com

Nakul, For me starting out it was all about learning & understanding the terminology along with the language. Similar to learning a foreign language you need to know what the words and terms mean before you can speak in full sentences. It really comes down to Finanical Literacy (Like reading comprehension in grade school). Theres a difference between reading the Wall Street Journal or Barrons and actually understanding what it is you're reading. What really helped me were the how to do XYZ for Dummies... -Stock Investing for Dummies -Bond Investing for Dummies -Money Management for Dummies Once you have the basics down & want to upgrade into the Macro -Currency Trading For Dummies -Hedge Funds for Dummies -Technical Analysis for Dummies (how to read charts) The best part is you can highlight and then go back and review with out having to reread the whole book. Other great books are: -The Art Of Short Selling -The Intelligent Investor (Ben Graham who was Buffets mentor) -Rich Dad Poor Dad -Keith also has a great selection of book recommendations on his Hedgeye site Once you have a grasps of Financial Literacy you then can watch interviews of the top Macro Traders like Keith & Raoul and start to really understand what it is they are talking about. (Like watching NFL Live on ESPN, if you don't know the terminology of Football you wont understand what the analysis are talking about even if you understand the big picture of Football. It's the difference of knowing what a Touchdown means vs knowing what a 3/4 Defense means or calling an audible at the line of scrimmage). The more you watch RV or Hedgeye along with other successful Macro guys like Stan Drunkenmiller or Ray Dalio it will start to click. Then comes the hard part... Actually putting skin in the game ($$$) making mistakes and learning from them. Hope this helps.

I think its not about printing right now until we get to the battle of the biggest MMT but about the shortage caused a global trade collapse...

Thank you for the reply. Much appreciated.

Raoul recommends the UUP for the long dollar trade. You can find that in various places if you search here. Today, on Twitter, he confirmed he is still all in on this trade. I found another dollar long ETF, USDU, that seems pretty similar, but I'm in no position to affirmatively recommend anything. Best of luck to all.

i'd like to hear Raoul comment on usdu. It has EM exposure and I think aussie, kiwi $s. decent volume.

I don't know exactly but i'm betting on being bullish on it. I will say that UUP is a bet against the major currencies- Euro,Yen,Pound,Canadian, Swedish, and Swiss so if you want to bet against some of the other currencies like the Peso and Brazian Real don't use it. The price action says this as well, UUP fell as the Euro and others shot up on the first wave of Equity pressure while the Peso was crumbling.

UUP ETF if that's the only long dollar instrument available to you, then ok. BUT it's a very poor trading instrument with really poor liquidity in the underlying itself and it's Options have even worse liquidity. Best use Futures and or the Options on the Futures. Anyone not comfortable with the aforementioned, next month The Smallexchange.com goes live and will open up simple to understand with much smaller notional values than 'regular' Futures.

Mike, what are some options on futures symbols for the long $ trade? How far out and how much out of the money? According to milkshake theorists we are at the early innings. Any ticker suggestions appreciated

FAO A.D. The symbol for USD Futures on most brokerages is /DX (DXY) however there is a small gotcha with /DX is that it's listed on https://www.theice.com/ and the brokerages market data fees for ICE are a rip off. However there is way around it. Most high liquidity futures are quoted on Globex where the fees are much less. Now /DX is not quoted on Globex but the following are /6A Aussie Dollar /6B British Pound /6C Canadian Dollar /6E Euro /6J Yen /DX is a representation of the USD against a basket of the above currencies plus also Swiss Franc and Swedish Krona. Now /6E makes up the biggest component approx 60% of /DX so without actually being able to trade DX itself, you would be expressing a long dollar position by shorting /6E. There are also 'micro' versions of the above on Globex /M6A /M6B /MCD /M6E /MJY

one more comment for A.D. you specifically asked about Options what month etc. I primarly look to establish short premium options positions for a $$ credit in any underlying not just FX futures at approx 45 days to expiry. You also asked how far OTM? Ans: Short Strikes should be beyond the expected move which approximates at 20 Delta.

Its quite straight forward, especially if you're buying the futures (and can handle to leverage). I've been warned away from futures options as they are not exclusively a rate-trade, involves what happens to LIBOR rate too.

Eurodollar (90 day interest rate) futures are typically found on most broker platforms under the symbol < /GE > . The comment below from C.S. is quite right saying /GE is highly leveraged and it is with a notional value of $250K per contract $2500 per point BUT only requires sub $1000 buying power reduction per contract and this low BPR confirms /GE is a low risk way to play interest rates for even the smallest of accounts. If my memory is correct when Raoul did a piece on Eurodollars last year, he did reference /GE futures, but also suggested bying long dated Call options and with that idea I do have an issue. When considering buying Options (in any underlying) can sometimes work out, folks need to appreciate that the mathmatical odds of coming out a winner is loaded against the Option buyer and heaviliy in favour of the Options Seller. Buying options to the uninitiated sounds so tempting in risk a little, with the possibility of making a lot. However the probability of making money is very small when buying options. If you want to establish a Eurodollar position, futures a greatly preferred. The following link will take you to an introduction video Eurodollar futures. https://www.tastytrade.com/tt/shows/futures-for-rookies/episodes/eurodollar-futures-07-08-2016

Buy American dollars and get a Hedgeye subscription. Short when Keith tells you to in “Real Time Alerts”. The Eurodollar trade and the bond trade are wrapping up. Shorting Story stocks is up next and Keith will guide you through it. Good Luck!

Hannah, Raoul said he expects the Euro to go to 82 cents. Hedgeye is telling you the Eurodollar trade is wrapping up?

One takeaway is whether current market action is a bear-market bounce or the beginning of a V-shaped recovery. Raoul expects more downside, after a possible retracement with opportunity to rebuild shorts; Keith will wait for the market data to come in. Sky rocketing unemployment and the inability of fed actions to prevent it, and distress in other areas of debt market, will continue to lead the economic cycle and thus stocks lower.

Which ones are those?

I suppose the value these uber bears may or may not bring you is the possibility that you are buying a bear markiet bounce and the value you perceive now ends up not being so. Wouldnt be consensus view.

Advisors selling you on a 60/40 portfolio (60% Stocks 40% Bonds) regardless of age, income, financial needs, and market cycles. Buck

Traditional Wall Street == Old Wall

The Great Wall of USA. Wall St.

They play smoothly for me and I'm in the woods.

I had that issue a year or two ago, and it has since been resolved.

Videos are delivered from Akamai, and Real Vision are using Brightcove services to manage the videos. There is literally nothing RV can do about the videos. Go short $AKAM

It's fine for me.

You've tried the normal stuff like clearing your cache and firewall settings? I ran into playback issues on Chrome a while back and it has struggled ever since - never could resolve it; I switched to Firefox - plays just fine on that browser. Another alternative ( I used this for a while - is to download onto the mobile app).

I have 12Mbps and works like a dream.

We don't get reports of that anywhere Im afraid. It must somehow be at your end with your browser

I watch all these on my iPhone with zero isdues

Smooth here. I used to have delays but that may have been when I lived in India.

I have problems too on my laptop. About half the time the videos appear to just hang but if I wait long enough they will resume. I don't think it's a buffering issue. And I can never play an RV video and switch to another tab without RV completely freezing. I use the Microsoft Edge browser with ad block, and if I had to guess I'd suspect it hasn't been tested with RV. Anyways I've almost given up trying to watch on my laptop, my phone though is fine with the RV app.

how to trade this (dxy-jpy) as a retail investor?

To be honest, they are more complementary that competitors. Both give you a different toolset to solve problems. If you treat both their services to further your education in the markets, then it adds to your overall knowledge base.

All my option positions are on the list above except for UUP which doesn't make your list Thanks for sharing.

Brilliant, Mike! Thanks

HYG also has great liquidity, tight spreads and some of the high delta puts have extremely low time value. COST may deserve a look despite liquidity concerns. Firstly a recession, never mind a depression, will cause discretionary spending to go down. Secondly, very unlike 2008, their Gasoline sales is hit by a double whammy - lower gas prices and negligible demand. I took a trip to 3 Costco's within 25 km and noticed the same thing - no queues at gas stations, gas at 65 cents in Canada - we've had it like NEVER. And customers walking out with low ticket price carts - toilet paper, flour, oil, canned goods, salt, diapers and stuff.

Mike T.... One of the nuances of the market is the 9:50 reversal...Also each time of the day the market does a lot of repeating from most prior days.... It's almost like someone that repeats a routine over and over.........Read this https://dimensiontrader.com/indicator/zt.jpegs/docs/time%20tips.pdf

Not headline but the value camel's nose is burrowing under the tent - https://www.marketwatch.com/story/if-you-do-this-now-you-might-be-able-to-double-your-retirement-portfolio-2020-03-23

Hear, hear. Thanks so much for all you do, Keith and Raoul!

What HE services do you subscribe to? They all seem valuable, but I probably don't have use for them all.

Phillip - start with Macro Show and Early Look. Then add risk ranges, which has paid for itself for me. If you don’t have another occupation real time alerts has a great track record back to 08, but I struggle monetizing with non financial career.

Hedgeye. Also there was the investment ideas video that Ed did with Darious Dale about 3 months back on RV which talks a bit about the 4 Quads. Just subscribe to both Hedgeye and RV like I'm sure many of the RV subscribers including myself do. The content is top notch.

Raoul did write a book, it’s called “The Business Cycle”.

As both a Realvision and Hedgeye subscriber, I would have liked Raoul to have discussed the long Bitcoin trade with Keith. For me, this was the only thing that was conspicuous by its absence. Not complaining though. The discussion was fantastic, regardless.

Great point about bitcoin - I hadn’t noticed.. I know Raoul has been accumulating, and Keith has none. But Keith will buy when his signals tell him to. I reckon if I only catch the part of the bitcoin move that Keith catches, that will be plenty.

Agreed Joel. He's traded it well.

You need to accumulate Bitcoin to have any chance. When it "moons", you cannot get an account opened for months on any exchange. That's what happened in 2017. And I would advice against trading it with futures as it will probably diverge quickly from the actual market.

IG Group (Spreadbetting - be careful when trading on margin) or puts via Interactive Brokers.

Open an account with Interactive brokers, they allow shorts on lots of stocks. The also have options trading.

Keith actually had some initial losses due to the virus. Then changed his mind.

Keith actually did call it. Essentially negative corporate earnings growth, jobless claims to spike, Quad 4 called for Q2, etc. He didn’t know what the catalyst would be or how sharp the drop was coming is all. (He expect that the 4Q19 GDP number would have a zero handle and that might be the catalyst, it seems.)

Everyone that has a newsletter/subscription service claims they called it. Raoul has been negative for a while. Not a subscriber to Hedgeye, but have seen their free stuff where they talk Quad 4. No one saw the virus outside of Macrovoices that I follow until well into February as being the main catalyst. Lots of people knew the market was overvalued, over-leveraged, and slowly declining. Too many people were buying into the hyperbole of the "great" economy when the numbers were already saying something else.

I'm subscribed to RV and Hedgeeye. Initially HE/Keith were sticking with Quad 3 in Q1 and a slight Quad 4 in Q2 when the virus news first hit in January. They were long Oil/Energy/Short USD as that is what their model indicates. They quickly flipped to "deep Quad 4" in their model once it was clear how devastating economically the COVID19 would be.

No one has a crystal ball but Keith and Roaul were pretty amazingly close. All respect to them.

No one really calls it - NO ONE, and no one can, let me show you why. I'll just talk about my own experience to show you the dilemma. Jan 23rd as Wuhan went into lock down, I immediately realized it will be Capital C crap if it comes on a cruise ship. Did I know for sure - NO. So looking at Risk Reward, I picked up RCL as they have 9% of their revenue from China. My WORST case scenario for RCL was a low of $68. That was our target #3 - Here's the internal discussion at our office "K: It does not have much strength and go up from resistance. It may come down because of virus and may go back up to touch the resistance. Targets 102-90-68 A: Drops down to 618 retracement of the bull run - 87, then virus scare goes away and inflation comes on thereby increasing prices and goes up to 170-190 target" We still did about 20x on the PUTs we bought which were only 5% of the portfolio. Could we have done better - absolutely, could we have bought 10% of the portfolio or even 85%? sure we could but not without adding on more risk that we think is safe for our portfolio. What if the virus couldn't take the high humidity on board a cruise ship? We could have lost that bet completely. Could we have pyramided on the way down? sure we could but not without throwing caution to the wind and playing with fire as buying options with very high Implied Volatility is not without its perils. Like any other good trade, the first 2 weeks it tested our patience completely and we felt like it perhaps was not going to go our way - i.e. the delta will not be worth the vega and theta decay. So I believe that except for GOD, no one can call it in Black and White. Everyone calls it in Risk Reward ratios. A set of probabilities to all 3 sides - Up, Down and sideways. You've got to pick up on it - like you pick radio signals. No one is going to hit someone on the head with a mallet with the call. AND these 2 gentlemen are doing a fabulous job calling it even now - Do you think FB or GOOGL will have more revenue this year or next ? Do you think MSFT will be any better ? will it sell more cloud services, more of the 40 year old MS office licenses - Gosh, we should perhaps have a 17 year limit on software licensing just like patents do. Do you think AMD has enough cash reserves and a product pipeline to escape the $2 valuation that it always gets in a depression. Do you think AAPL will still sell a $1000 iPhone with $800 of profit in it when the unemployment rate is 30%? Do you think DIS still can charge $170 day for the privilege of first queuing up at their gates, only to come in and queue up again at their rides. Here, I gave you some specific calls :) please consider these are just for entertainment purposes and are not investment advice.

It is Darius Dale

Theodoros I think Keith's point makes more sense when you look at the relative prices of put options. Put optionality on companies like Alphabet on Facebook remain relatively cheap, while options on perhaps more vulnerable companies like Tesla and American Airlines have gotten extremely expensive.

Am also interested in this answer; thank you!

Hedgeye University is good, https://app.hedgeye.com/world/terminology Also, the daily macro show is worth a watch - subscribe on Hedgeye.

I am in a similar position. 33% gold, 33% cash; 33% utilities (sold my bond positions). Where next?

TLT , bond ETF

Emerging markets are a source of growth and prized coz so. A possible bet (and please take this on entertainment value rather than a trade idea ... usual investment disclaimer applies), so a possible bet is to short Emerging Markets. Crappy for options traders due to lack of liquidity and higher Implied Volatility, but perfect for a less sophisticated investor. For example go short on EPI (Wisdom tree India Earnings fund). A - The only thing positive for the Indian economy is a lower Oil, but it's mileage is limited too - they are so polluted that they can't really have more cars on the road and push their economy higher. B - On the flip side, their wall street (refereed to as Dalal street - the word "dalal" means a middle man but commonly used to refer to a Pimp, so how true as Wall street does whore out the whole of main street), Their wall street has been ripping for years while first demonetization and then GST implementation and then a controversial anti-muslim immigration law has been causing immense problems domestically. C - If one country can have a capital C catastrophe due to COVID ... you guessed it right. Hope and pray that it doesn't happen. The loss of life will be really like shit hitting the fan. In fact your trade will work regardless, so you can very well afford to be nice in your prayers. D - You automatically benefit from the Dollar inflation trade that Raoul is talking about. You can also Short Canadian Banks - RY, BMO, BNS, TD and CM are cross listed. BNS and BMO have fair amount of exposure to Oil exploration and midstream. So, going short on them A - You automatically benefit from the dollar trade B - You benefit from bankruptcies in Oil sector C - You benefit from the standard PE reduction of a bear market D - Something more complicated, but what these banks did is they lowered their reserves and pushed the excess as profits. Showing such higher profits made their stocks rip higher. Now it will be reverse, they will have to increase their reserves, which might also mean raising more capital as their capital adequacy ratios may take a hit. But leave this complexity aside, as this will be in a couple of quarters and not immediately.

The Q Ball on the billiard table Moved AGAIN!!!

Its the aircon and the ceiling fans

I think we need to get used to this across all media channels!

More snowflakes about I see.

What’s not to like about a phuck bucket of volatility :)

Open up a US Dollar foreign currency account with HSBC, then use a service like Transferwise or Revolut to do the exchange from GBP for you, and send it to this account. Alternatively, just hold US Dollars on Transferwise (Borderless Account) or Revolut. Just not sure if this method would be covered by the Financial Services compensation scheme though. If you don't trade FX, and want more juice with 3x leverage on daily moves, there is also the SGB3 ETF. Just be aware this is synthetic replication (swaps = counterparty risk) rather than physical though.

Thanks James, SGB3 sounds like a good option It's possible I'm better just buying GBSS or PHGP that way i'm backing gold prices and the dollar (v GBP)

Possibly Matthew. I've ridden the move down from $1.29 via SGB3, but am concerned about what could happen to this ETF if stockmarkets close for some time.

Think we can see a sharp bounce as people are dying to buy back in. And it is an unusual cycle. But based on past downturns, we should have several months of declines. Trump is talking about reopening the economy, but what does that mean. Virus will be running rampant through the population. A significant minority will need to be hospitalized, and a large number of people will not go back to their old habits to risk getting the virus. So agree with the guys, this will play out much longer but will have bear market rallies like today. Volatility is so crazy it is hard for me to participate. So holding onto my cash for now.

On its way....

I disagree, with Keith's service you need to be active. When he says in the macroshow to get out or he has changed his views, then you better follow. I find RV very useful for the educational part, but to get real trades out of it no, not as good as hedgeye.

@RaoulGMI @KeithMcCullough

Saxo Trader in Australia have US options trading, so can but puts on US stocks. I think CMC and CommSec have Aussie options.

Thanks James.

Interactive Brokers

Interactive Brokers Australia will let you short stocks and futures. Get a direct access CFD Broker (IB is one). Use Citi short warrants (I know CommSec covers these) that trade on the ASX. But puts, but after vol falls.

Would be great to have some explanation /educational videos in additional to these conversations on how to execute these trades. We are not pros like you. That would be helpful. Most of us I think watching this and it is great but we don't know what to do with this info so we can't profit out of this. Thanks!

Liked the interview though....

This is how you learn.