LEGAL DISCLAIMER TERMS OF USE

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2 LEGAL DISCLAIMER Hedgeye Risk Management is a registered investment advisor, registered with the State of Connecticut. Hedgeye Risk Management is not a broker dealer and does not provide investment advice to individuals. This research does not constitute an offer to sell, or a solicitation of an offer to buy any security. This research is presented without regard to individual investment preferences or risk parameters; it is general information and does not constitute specific investment advice. This presentation is based on information from sources believed to be reliable. Hedgeye Risk Management is not responsible for errors, inaccuracies or omissions of information. The opinions and conclusions contained in this report are those of Hedgeye Risk Management, and are intended solely for the use of Hedgeye Risk Management s clients and subscribers. In reaching these opinions and conclusions, Hedgeye Risk Management and its employees have relied upon research conducted by Hedgeye Risk Management s employees, which is based upon sources considered credible and reliable within the industry. Hedgeye Risk Management is not responsible for the validity or authenticity of the information upon which it has relied. TERMS OF USE This report is intended solely for the use of its recipient. Re-distribution or republication of this report and its contents are prohibited. For more detail please refer to the appropriate sections of the Hedgeye Services Agreement and the Terms of Use at HEDGEYE 2

3 HEDGEYE ASSET ALLOCATION

4 HEDGEYE ASSET ALLOCATION 90% 80% 70% 60% 50% 61% The maximum preferred exposure for cash is 100%. The maximum preferred exposure for each of the other asset classes is 33%. 88% 40% 30% 20% 10% 0% 0% 12% 18% 0% CASH U.S. EQUITIES INT'L EQUITIES COMMODITIES FOREIGN EXCHANGE FIXED INCOME

5 1 2 3 USD JAPAN COPPER

6 USD The U.S. Dollar was down (again) -2.2% last week (-5.7% year-todate) after both the PMI (50.4) and Consumer Confidence numbers slowed (again) on Friday. Markets are obviously questioning whether a Dovish Fed can replace actual growth with some version of stagflation, but USD is signaling immediate-term oversold inasmuch as Gold is signaling overbought.

7 JAPAN One of the best ways to make money on the short side of Equities this year remains Japan not only is the U.S. slowing (Dollar Down, Yen Up), but the #BeliefSystem is finally breaking down that Japan (or Europe) can do anything to stop it. The Nikkei is getting newsy though, signaling immediate-term oversold -3.1% overnight (-23% since July 2015).

8 COPPER Instead of buy USD (not brave enough, yet!), we sent out SELL signals in both Oil (+5.2% last week) and Copper on Friday; both are signaling overbought inasmuch as USD is signaling oversold. Copper $2.31 is an important macro level for the stagflation vs. #Deflation debate; so far longer-term #Deflation is still winning.

9 HEDGEYE MACRO PROCESS: RATE OF CHANGE

10 HOW IS THE BEARISH CONVICTION? NON-EXISTENT

11 S&P REVENUES & EARNINGS COMPS

12 HEDGEYE SECTOR PERFORMANCE

13 HEDGEYE SECTOR RELATIVE PERFORMANCE

14 HEDGEYE STYLE FACTOR PERFORMANCE

15 HEDGEYE RATES & SPREADS

16 CFTC NON-COMMERCIAL NET LONG POSITIONING

17 MARKET SHARE VOLUME & TOTAL VALUE TRADED

18 JAPANESE YEN TO U.S. DOLLAR INDEX

19 COPPER SPOT PRICE

20 FTSE MIB (MILAN) INDEX

21 TOKYO NIKKEI AVERAGE INDEX

22 NASDAQ COMPOSITE INDEX

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24 UST 10YR U.S. 10-YEAR YIELD

25 SPX S&P 500 INDEX PRICE 2,150 2,100 2,050 2,000 1,950 1,900 1,850 1,800 1,750 1,700 1,650 2,000,000,000 1,800,000,000 1,600,000,000 1,400,000,000 1,200,000,000 1,000,000, ,000, ,000, ,000, ,000,000 0 VOLUME

26 SPX S&P 500 INDEX 2,100 2,000 1,900 1,800 1,700

27 RTY RUSSELL 2000 INDEX 1,220 1,180 1,140 1,100 1,060 1,

28 RTY RUSSELL 2000 INDEX 1, ,000,000 PRICE 1,180 1,140 1,100 1,060 1, ,000, ,000, ,000, ,000, ,000, ,000, ,000, ,000,000 0 VOLUME

29 VIX VOLATILITY INDEX

30 CLA WTI CRUDE OIL

31 CLA WTI CRUDE OIL , , ,000 PRICE , , ,000 VOLUME 30 50,

32 DXY U.S. DOLLAR INDEX SPOT

33 CRY TR/CC CRB COMMODITY INDEX

34 GOLD GOLD SPOT PRICE 1,330 1,280 1,230 1,180 1,130 1,080 1, , , , , ,000 50,000 0 VOLUME

35 GOLD GOLD SPOT 1,330 1,280 1,230 1,180 1,130 1,080 1,

36 HGA COPPER

37 NGA NATURAL GAS SPOT

38 EURO EURO SPOT

39 YEN JAPANESE YEN SPOT

40 NKY NIKKEI-225 STOCK AVERAGE 22,000 20,500 19,000 17,500 16,000 14,500 13,000

41 NKY NIKKEI-225 STOCK AVERAGE 22,000 20,500 19,000 4,000,000,000 3,500,000,000 3,000,000,000 2,500,000,000 PRICE 17,500 16,000 2,000,000,000 1,500,000,000 1,000,000,000 VOLUME 14, ,000,000 13,000 0

42 SHCOMP SHANGHAI COMPOSITE INDEX 4,500 4,000 40,000,000,000 35,000,000,000 30,000,000,000 25,000,000,000 PRICE 3,500 20,000,000,000 15,000,000,000 VOLUME 3,000 10,000,000,000 5,000,000,000 2,500 0

43 SHCOMP SHANGHAI COMPOSITE INDEX 3,300 3,100 2,900 2,700 2,500

44 IBEX 35 SPANISH CONTINUOUS MARKET 11,000 10,000 9,000 8,000 7,000

45 DAX GERMAN STOCK INDEX 11,000 10,500 10,000 9,500 9,000 8,500 8,000

46 DAX GERMAN STOCK INDEX 12,000 11,500 11, ,000, ,000,000 PRICE 10,500 10,000 9,500 9,000 8,500 8, ,000, ,000,000 50,000,000 0 VOLUME

47 UST 2YR U.S. GENERIC GOVT 2-YEAR YIELD

48 HSI HONG KONG HANG SENG INDEX 24,000 23,000 22,000 21,000 20,000 19,000 18,000 17,000

49 SENSEX BSE INDIAN SENSEX INDEX 27,000 26,000 25,000 24,000 23,000 22,000

50 KOSPI SOUTH KOREA KOSPI INDEX 2,125 2,025 1,925 1,825 1,725

51 UKX UK FTSE 100 INDEX 6,700 6,500 6,300 6,100 5,900 5,700 5,500

52 ASE ATHENS STOCK EXCHANGE GENERAL

53 RTS 1, RUSSIAN RTS INDEX 600

54 DAX GERMAN STOCK INDEX 12,000 11,500 11,000 10,500 10,000 9,500 9,000 8,500 8,000

55 CAC FRANCE CAC 40 INDEX 5,100 4,900 4,700 4,500 4,300 4,100 3,900 3,700 3,500

56 FTSE MIB BORSA ITALIANA INDEX 23,500 22,000 20,500 19,000 17,500 16,000 14,500

57 POUND BRITISH POUND SPOT

58 PSI 20 PORTUGAL PSI 20 INDEX 5,750 5,500 5,250 5,000 4,750 4,500 4,250

59 AS51 AUSTRALIA S S&P/ASX 200 INDEX 5,600 5,400 5,200 5,000 4,800 4,600

60 RUB RUSSIAN RUBLE SPOT

61 XOP OIL & GAS ETF

62 COA 55 3YR BRENT CRUDE OIL FUTURE

63 SPY 3YR SPDR S&P 500 ETF TRUST