Market Brief- July 18th

A lot of the data points come from Hedgeye.com. Subscribe to the, if you want to find a better way to risk manage your capital.

Daily Brief:

S&P started the day in the green, hitting a high of 3900. As the day progressed, it began falling out and closed the day in the red at 3830 (down 0.84% on the day). The VIX (volatility index) closed the day up 4.96% at 25.43.

Major moves of the day:

Bond Yields

30YR closed at 3.13%

10YR closed at 2.96%

2YR closed at 3.17%

Yield curve is completely inverted with a 21 basis point inversion.

Commodities

Oil ended the day up 4.75% at $102 but down 7.4% on the month.

Gold finished at $1707 up 0.02% on the day but down 6.6% on the month

Natural Gas finished up strong at $7.44 up 6% on the day and up 10.74% on the month.

Steel finished down 5.5% on the day at $3713 and down 13% on the month.

Cobalt was down 8.27% on the day and finished the day at $55445 down 23.43% on the month.

Wheat up 5.12% on the day at $816 but down 20.5% on the month.

Nasdaq closed down 0.81% on the day at 11,360 and Russel 2000 closed down 1738, down 0.34% on the day.

Big Tech (Tesla, Microsoft, Amazon, Meta, Google, Netflix, Apple) started the day strong, but many closed down on the day or a little up.

China (SSEC) closed up big on the day at 3278. I sold my China long position (KWEB) until the Hedgeye signal comes back to full on bullish.

Europe (Italy, France, Germany, Poland) ended up on the day but it is still trending down.

The Dollar Index closed down 0.58% at 107.44 but up close to 12% this year.

Crypto BTC is up 2.7% on the day at $21,530. ETH up 9.8% on the day at $1,474. MSTR up 5.44% closing at $225 and COIN up 9.07% closing the day at $58.67. I am not chasing anything crypto here, only shorting.

Thoughts on today and going into Tomorrow

I didn’t make any major moves today. I added 3 equity shorts and held on to all my core shorts (XLY, QQQ, XRT, XLK). Today was definitely a good day to short crypto, Europe, some commodities and certain equities. I personally kept it light today, as I want to leave myself room going into tomorrow in case we get a rally of some kind. Don’t get caught up with shorting on big down red days, those are the days you should be covering. Only sell on green days. Today was a great example of how SPY started in the green giving many good short opportunities and ended the day in the red (not so much when you want to add to your shorts). And always leave yourself room for the next day. Never “need” tomorrow to go a certain way.

That’s all for now,

Wassim