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Track record

 
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It's not difficult to handpick your best market calls. We definitely don't get every market call correct, but our Gravitational Framework has allowed us to consistently catch major macro market moves before they begin.

Here are a few examples of our non-consensus market calls.  All market calls are accompanied by a time stamped link to the original source.  If you would like to discuss our framework and track record in more detail, we invite you to contact us here.


2018

October

October 17: Reflation's Rollover Says Short SPDR S&P Oil & Gas Exploration ETF (XOP).

"Fundamentally, the combo platter of U.S. growth and inflation slowing in unison is XOP’s kryptonite. Quantitatively, it doesn’t get much better for shorting than when a market starts to turn less bullish and all Quantitative Gravity factors are skewing to the bearish side. Behaviorally, being short U.S. crude oil-related equities remains a contrarian idea as investors continue to plow money into XOP, ignoring the U.S. inflation reality. "

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October 9: Why Technology and Consumer Discretionary stocks are at Risk.

"There are a lot of risks percolating in financial markets each day, but one that is front and center at all times is what we refer to as “relationship status risk.” For starters, this isn’t the kind of relationship risk that occurs when you decide to be honest about how you really feel about your in-laws. I’m talking about the relationships between and across markets. Bill Nye the Science Guy would call this “correlation.” By a wide margin, U.S. tech and consumer discretionary sectors are the best-performing asset classes in the world, both on a year-to-date and trailing 12-month basis. In fact, there are few asset classes that have performed better over the last 27 months, but the relationship between these two asset classes and the greenback and U.S. yields may be signaling last call at this party."

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October 3: Draghi's Dilemma Says Short iShares MSCI Germany ETF (EWG).

"Fundamentally, it simply doesn’t get more bearish for an equity market than when its economy is confronted with an FG4 environment characterized by both growth and inflation slowing. The German economy is getting whack-a-moled by this bearish combo platter right now, and its equity market is paying the price. Quantitatively, all factors (except Topo) are flashing deeply bearish signals, and EWG has been making a series of lower highs for the last eight months. This is the textbook definition of a bear market. Behaviorally, investors have become bullish on EWG in response to its recent +5.1% three-week rally. This divergence between EWG’s bearish Fundamental Gravity and its bullish Behavioral Gravity is exactly the type of opportunities we look to capitalize on."

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September

September 26: Reflation's Rollover Says Short Oil Services ETF (OIH).

"Fundamentally, the combo platter of U.S. growth and inflation slowing together is OIH’s kryptonite. There is simply no way OIH will muster any upside momentum against that Fundamental Gravity backdrop. Quantitatively, all aspects of OIH’s QG are bearish. The most bearish development recently is TOPO beginning to rise off its lowest level in 12 months, indicating a high level of drawdown risk over the next few weeks. Behaviorally, investors are becoming more bearish as OIH declines, but they still aren’t nearly bearish enough."

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September 19: Slowing Dragon Says Short China Large Cap ETF (FXI).

"The Fundamental Gravity bottom line is that a wide swath of Chinese data continues to flag slowing growth as we enter Q4 2018. Despite a mild move to higher inflation throughout the summer, the inflationary downtrend remains very much intact and likely heading lower. Quantitatively, all factors for FXI remain extremely bearish. That said, when shorting a bear market as entrenched as Chinese equities are currently, it’s critical that you risk manage the inevitable dead cat bounces. Behaviorally, investors are displaying classic humanness, attempting to catch falling knives by adding more money to FXI after its intra-2018 crash. When the three gravities align this way, you wait for a short-able bounce and you go huntin’ for wabbit!"

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September 5: As Growth and Inflation Slows, U.S. Shift Work Says Get Short XLF

"Fundamentally, U.S. growth is slowing, and the Fed remains committed to two more rate hikes this year. This combo platter creates a bearish environment for U.S. financial institutions. Quantitatively, XLF isn’t bearish yet, but it’s becoming less bullish. Remember, every bear market begins as a bull market that gets less bullish. The best shorting opportunity is when the phase transition from bull to bear is occurring, not once it’s complete. Behaviorally, XLF’s Behavioral Gravity Index is flashing bearish, but being short U.S. financial stocks is far from a consensus trade. There is currently a very low behavioral risk to initiating (or holding) short positions in XLF."

August

August 8: As Growth Slows, U.S. Shift Work Says Get Long XLU

"The Fundamental Gravity bottom line is that we are witnessing the U.S. Growth a Go-Go theme passing the baton to the U.S. Shift work macro theme. Asset classes that perform well when U.S. growth slows bottomed between late April and June. Now, starting with the July data, we are starting to see chinks in the U.S. growth armor. The Quantitative Gravity bottom line is that XLU is firing on all quantitative cylinders right now, and you should be buying pullbacks until further notice. The Behavioral Gravity bottom line is that the utilities sector will be one of the best-performing sectors, from both a risk and return perspective, in the second half of the year. Clearly, investors don’t fully understand the U.S. Shift Work macro theme, because they are not nearly bullish enough on utilities."

June

June 27: Lower Highs Are Telling the Entire Story for being Long U.S. Consumer Staples

"The Fundamental Gravity bottom line is that when U.S. growth slows, consumer staples is one of the few equity sectors that outperforms on a relative basis in terms of both return and lower drawdown risk. The Quantitative Gravity bottom line is that all four quantitative aspects are decidedly bullish, and all we need to get this consumer staples party started is a buyable pullback. The Behavioral Gravity bottom line is that investors are bearish on XLP because they believe the high growth train we’ve been on for the last two years is still a long way from its destination. Those of us who are data-dependent know that the train is still chugging along, but we are very close to the station. "

June 20: Humanness and a Shorting Opportunity for U.S. Semiconducotrs

"The Fundamental Gravity bottom line is that the combo platter of slowing Asian economies with an impending U.S. economy slowdown is going to induce a semiconductor bear market. The Quantitative Gravity bottom line is that while SMH’s readings are still bullishly inclined, they are deteriorating at the margin. All bear markets start out as a bull market that first gets less bullish and then enters a bear market. The Behavioral Gravity bottom line is that investors are starting to turn bearish on SMH and vote with their feet. Luckily for us, SMH’s price is still hovering near 2018 highs, which means there’s plenty of downside from here and room for people to get even more bearish once SMH’s price has capitulated to the downside."

May

May 30: The Other Korea

"Fundamentally, when South Korea’s economic equation equals growth down plus rising inflation, EWY has the following performance statistics: average quarterly return is -5.3%; average drawdown is -16.7%; and positive quarterly hit rate is 43%. Quantitatively, three of the four aspects of EWY’s underlying market structure indicate bearish conditions ahead. Behaviorally, investors remain bullish on EWY, despite a supremely bearish set-up for emerging markets generally and a bearish Fundamental Gravity in South Korea specifically. All three Gravities are aligned and decidedly bearish, which means it’s time to put on a short trade and go huntin’ for wabbit."

May 23: Cry for Me Brazil

"Fundamentally, Brazil’s economic equation is murky, and when you toss in the political uncertainty surrounding the October election, you have a Caipirinha-esque recipe for a drawdown in Brazilian equities. Quantitatively, all four aspects of EWZ’s underlying market structure are indicating that the most likely direction for price is lower, making EWZ a prime short candidate. Behaviorally, investors remain bullish and continue to plow money into EWZ based on last year’s performance, completely unaware of the drawdown risk that is rising.All three Gravities are aligned and decidedly bearish, which means it’s time to put on a short trade and go huntin’ for wabbit."

May 18: Rockin' Reflation in Short Trade on US Industrials

"This asset management call is simple: corporate earnings are at a cyclical peak, while both raw material and wage costs are accelerating. To add fuel to this bearish fire, this domestic economic reality is occurring against a backdrop of slowing global growth. This economic equation means industrial companies with no pricing power are going to be squeezed where it hurts most: in their wallets. This is a decidedly bearish Fundamental Gravity, which means it’s time to put on a short trade and go huntin’ for wabbit."

May 2: Going Both Ways Globally in Mexico and Brazil

"No, I’m not talking about a Fifty Shades of Gray scenario. I’m talking about trading from both the long and short side of markets. A lot of people in this game, especially those residing in the U.S., are entirely focused on being long. They will only evaluate opportunities in which an asset class can increase in value. This myopic focus greatly inhibits their performance and risk management, and causes them to miss trades with much better risk profiles than simply being long. Sometimes, when I feel frisky, I go both ways at the same time. Right now, I’m feeling frisky about Latin ‘Merica and a trade with the potential for a much better risk-reward setup than anything I’m seeing in the States. Join me as we head south this week: pack your passports, my friends, and make sure you have a wad of pesos and reals in your wallet."

April

April 25: Going Back to the Bar with German Equities

"As is usually the case, investors are being led by storytelling and EWG’s price chart, rather than the three Gravities. The best market opportunities come when investors’ perception of a market diverges from that market’s Gravitational reality. That is exactly what is happening with EWG right now."

April 18: Energy’s Resurgence after a slow start to 2018

"Investors have yanked close to $800MM in assets collectively from XOP and XLE and are running for the doors when they should be anchored to the couch, and waiting for the energy show to start."

MARCH

FXI: SLower China Growth, Rising Inflation Equals Crash in Equities

"Since peaking on January 26, FXI has lost 12% and experienced a max drawdown of -14.7%."

Trading Lesson: The Benjamins and How USD Finds Its Footing

"The greenback has quietly been the best-performing currency in the world, gaining almost 200 basis points."

JANUARY

Roll Over in Energy

"If inflation begins to slow while U.S. growth continues to accelerate, then being long U.S. technology and out/short U.S. energy stocks will be a profitable way to roll."

2017

DECEMBER

Long the Consumer Discretionary Sector Via XLY

"If you remain data dependent, process driven and risk conscious, then you know it’s nothing but clear skies for U.S. equities from now through the end of the year. U.S. economic data remains robust, inflation is healthy and U.S. yields are holding steady."

NOVEMBER

Long Financials on any weakness

"The bottom line is that slowing U.S. growth matters big time for anyone invested in the S&P, or U.S. equities in general...But unfortunately for the U.S. equity bears out there, we aren’t there yet. The balance of 2017 will remain conducive for U.S. equities, especially the growth oriented sectors of the U.S. economy."

OCTOBER

Long Biotech Via IBB

"The iShares NASDAQ Biotechnology Index ETF (IBB) has a 5% pullback, providing an opportunity to enter a market still up over 20% for the year."

SEPTEMBER

Short the Recent Euro Strength

"You can use the euro’s strength to initiate a short trade idea ahead of the ECB meeting but I would keep the position size smaller than your usual size."

JUNE

Long South African Equities Via EZA

"For those of you interested in capitalizing on this South African equity opportunity, you could consider using the iShares MSCI South Africa Index ETF (EZA)."

VIX Will Remain Surpressed in the Short Term

"The bottom line is that we are almost certainly at a bottom for the VIX, but without a catalyst we will continue to cruise along this floor for the time being. Remember, markets don’t go straight up or straight down—they are cyclical. The VIX is down 60% since the election, and at some point it will go higher."

MAY

Avoid SNAP But Trade Tech Via XLK

"Don’t be Captain Stock Picker or blindly follow your friends into the latest and greatest IPO; consider investing via an instrument like XLK. This approach allows you to take advantage of the current economic environment without worrying about Wall Street or whether SNAP’s DAUs disappoint."

APRIL

Rollover in Silver

"From a short-trading opportunity perspective, it doesn’t get much more appealing than what I’m seeing in the silver market. Despite silver’s Fundamental Gravity shifting from bullish to bearish, silver is still being priced at level commensurate with a bullish Fundamental Gravity and not fundamental kryptonite. Not only that but despite a 15% gain in 3 months, investors are still leaning extremely long and complacently expecting low volatility for the foreseeable future."

"Fundamentals are shifting, quantitatively the silver market is trading at a level with a favorable reward-to-risk set up, and investors are leaning long and expecting the low volatility rally of Q1 to continue for the foreseeable future. From a short-trading opportunity perspective, it doesn’t get much more appealing."

Long GDP.AUD Currency Pair

"On the short side, all three gravities for the Aussie are decidedly bearish, and when I couple this with a long pound, I get a relative value trade with a very favorable risk profile because both sides are skewed in my favor."

MARCH

Long the British Pound

"For investors who prefer exchange-traded funds, ETFs, you can get long the British pound via the Guggenheim CurrencyShares British Pound Sterling Trust, FXB. You can initiate new long trade ideas at any price below $123.00."

Rollover in US Energy Stocks

"Not only is the Fundamental Gravity turning bearish for US energy stocks, but quantitatively there is also a heavy weight around their feet. The recent breakdown in the crude oil price is a hugely bearish quantitative development."

FEBRUARY

Stay Long US Equities

"Despite the fact the S&P has jackknifed since the election, gaining 10% and closing at an all-time high last week, the behavioral gravity remains bullish. In a word, people aren’t yet bullish enough on the S&P 500 I’ve been LONG the S&P 500 since last September, and right now both the data and the framework are saying there is only one way to continue to trade the S&P: from the LONG side."

JANUARY

Go Long Financials and Tech, Avoid Utilities and REITS

"The playbook for accelerating U.S. growth is straightforward. Favor sectors that perform well in a higher growth environment, such as financials and technology, over defensive sectors like utilities and REITs."

2016

DECEMBER

Long Tech and Small Caps

"I would be LONG the U.S. technology sector at current prices. If we get a decent pullback I would consider also getting LONG U.S. small caps."

NOVEMBER

Long Consumer Staples, Short Energy

"You can listen to the “this time is different” guys and blindly buy the S&P 500, or you can allow me to show you the benefits of being LONG the consumer staples sector via the Consumer Staples Select Sector SPDR ETF (XLP), while being SHORT the energy sector via Energy Select Sector SPDR ETF (XLE)."

Rollover in Energy

"When the correction in crude oil occurs, all those investors who chased XLE’s recent performance will realize they bought high and now must sell low. I can promise you that chasing a market like this based on strong recent performance is a recipe for disaster."

OCTOBER

Rollover in Crude

"Behaviorally, it doesn’t get more bearish for oil. Hedge funds and other institutional investors are all-in on the LONG side of crude oil. Historic positioning on one side of a market almost always unwinds in a violent and unpredictable manner. I’m not sure how many buyers remain, but there can’t be many. Sentiment is so aggressively bullish on oil that when I see the current fundamental and quantitative gravities, I start to salivate and look for good entry points to be SHORT black gold..."

Avoid VXX

"One of the primary issues that most people are unaware of is that VXX doesn’t even come close to tracking the VIX Index. Even if you know what you’re doing, VXX can’t help you execute."

SEPTEMBER

Strong USD is Coming

"You’re probably thinking that your bond exposure will save you. Think again. US corporate bonds, US Treasuries, US high yield and emerging market debt are all negatively related to the Greenback right now. Yes, even your precious, and taxfree, US munis are moving in the opposite direction right now. And if you own commodities, 'I pity the fool!'"

AUGUST

Rollover in Chinese Equities

"FXI is up 16% since Brexit and is trading at nine-month highs. The equity markets are indicating that all is well, but one peek under the hood reveals something very different…make no mistake about it, China is falling into a liquidity trap. Investors, both individual and corporate, are hoarding cash because they don’t trust the economy and neither should you."

Reiteration of Long USD

"Right now, no one is talking about the US dollar and investors positioning is split right down the middle, with no one willing to lean one way or the other. This is the ideal bullish set up for me. I have the fundamental and quantitative gravities flashing bullish signs, and investors haven't figured it out yet."

JULY

Long USD

"Most recently, the USD managed to close above the $96.50 area for 6 consecutive days. This is a very significant and bullish quantitative development."

JUNE

Reiterate Long Gold

"The final trade I love is the being long gold. Gold, no matter what you hear from others, gold is simply a trade on interest rates and it performs best when interest rates are falling or are low."

MAY

Upturn in USD

"The one oddity is the US Dollar. You would expect that the recent strength might give way to further weakness, but not so fast. I think the recent strength in the US Dollar will continue, possibly after a slight pause should the Fed fold on a second hike."

APRIL

Reiterate Long Gold and US Treasuries

"Practice patience and if you haven’t had a chance to initiate a LONG trade idea in TLT or GLD, it’s not too late. Markets are cyclical and you can be sure that you will get another chance. There is a long way to go in 2016"

MARCH

Long US Tech

"The point here is don’t fear bubbles and don’t avoid markets altogether because some people are calling them bubbles. Bubbles don’t pop in a day. The bigger the bubble, the longer it takes for the markets to work off the excess. … I went long QQQ because it broke out to new 2016 highs, held for 3 consecutive days and is now consolidating nicely just above $105.50."

Long US Defensive Sectors

"If you must have US equity exposure make sure its defensive: utilities and consumer staples."

FEBRUARY

Upturn in Gold and US Treasuries

"GLD, which represents gold, is up 5.4% and TLT, which represents long-dated Treasuries is up 5.6%. The beauty is that these moves are just getting started. I know this because the price action in both securities has only recently started to pick up and the speculative positioning in gold and Treasury futures is still extremely lopsided to the SHORT side."

Long the USD

"I’m going to look for two things to see whether or not I should stay long or maybe shift to a short buy in UUP and that’ll be how the US dollar trades around Fed-related events and how—or at all—how positioning starts to shift in the dollars futures markets because, again, right now it’s extremely long."

JANUARY

Long US Treasuries

"Our Top Pick for conservative investors in 2016 is iShares 20+ Year Treasury Bond ETF (TLT). It's one of the most actively traded ETFs providing ample liquidity."

Short USD

"So far, the USD is up year to date. Once the market begins to realize whats unfolding, I expect the USD to show significant weakness. Keep in mind, that the price action of the USD is not just dependent on Fed policy but it’s also being impacted heavily by the fact that the rest of the world is still in an easing stance. So, don’t expect a full on collapse of the USD to be the signal that things are beginning to shift. That said, a close below $97 and a decline to the $93 area would be a pretty good indication."

The Fed Will Not Raise Rates 4 Times This Year

"The Fed made a mistake raising rates in December, they just haven’t admitted it yet. Given the US growth trajectory and the global backdrop, there is no chance the Fed will raise rates 4 times this year."

Long Gold Miners

"GDX could trade as low as $12.50-$13.00 before beginning to move higher. If GDX closes above $15.00 it will be a confirmation signal that this theme is beginning to play out. If GDXcloses above $17.00, load the hopper because GDX is headed to $30.00."

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