Ranking Macro Indicators/ Which Matter Most?

For a book of deep ITM LEAPS on high multiple growth and space names, rank by what actually moves the discount rate on far out cash flows, not by textbook macro importance. Real yields and the 10 year would sit at the top. RKLB and NBIS are long duration assets, most of their value is earnings way out in the future, so the long end of the curve is the discount rate on exactly those cash flows. That is why high multiple growth bleeds hardest when real rates jump. Yield curve moves matter through the same channel. CPI and PPI sit one level up from that. They mostly matter as inputs to rate expectations, so trade them for the vol around the print rather than as standalone signals. Actual Fed decisions are usually priced in, the surprise lives in the dots and the guidance, not the cut itself. Mag 7 earnings move your names through beta and risk sentiment, not through their own fundamentals. On the hedge: your LEAPS are already long vega, and a real pullback spikes IV, so on the way down vega cushions you and your LEAPS lose less than raw delta suggests. Long dated puts are also long vega, so hedging LEAPS with far out puts pays for vol on both sides and gets expensive fast. If the goal is a clean delta hedge into a macro event, shorter dated puts or put spreads isolate the move you actually want without doubling up on vega.

Huge help! Thanks for this. Just to clarify, you’d rate CPI and PPI as the primary indicator for the type of growth stocks I trade, then the yield and 10 year index would follow in 2nd? Do you feel like these indexes are actually accurate in showing market cycles before they happen? In my experience, most standard indicators (200/50 SMA) coincide with the stock price so they don’t do much to help weigh the probability and direction of a market cycle. Once again, awesome knowledge here. Thanks for sharing.

I’ve been trading longer than I care to admit. What I observe is that markets evolve. A great indicator during one market cycle sometimes becomes near irrelevant during the next cycle.  What I suggest is keeping things relatively simple. Leave the 20 indicator models for those with vast resources. Do use more then one or two no matter how good the back test looks.  Keep learning. Keep evolving. There can be a fine line for when to change. There is no holy grail. Even if there was, it likely would stop working after a while as more people and firms discover it. 

i would reorder the question before ranking the list, because most of that list cannot help you at the horizon you actually trade. your position is 365 DTE and 0.70 delta. that is close to owning the stock with financing. a CPI print or a single Fed decision moves your mark for a week and then the position is back to being a bet on RKLB and NBIS specifically. so the indicators that matter for you are the slow ones that change the discount rate regime for a year, not the fast ones that make a headline. from your list that is the yield curve and the direction of the rate path. VIX, fear and greed, and the individual surprise prints are noise at your horizon and will mostly generate hedges you take off at a loss. the bigger thing missing from your list is that none of it is idiosyncratic to what you own. up 300 percent on RKLB, NBIS and DRAM is a high beta long duration growth bet, and the macro variable that actually drives that book is real rates plus risk appetite for unprofitable growth. an indicator set built around the S&P will understate how much you move when that specific factor turns. on the hedge, long puts ahead of pullbacks is the expensive version and it needs you to be right on timing twice. cheaper structurally: hedge the factor not the names, since index puts are much cheaper in vol terms than puts on your actual holdings, and accept the basis risk. or just reduce delta, which costs nothing but upside. one thing i would add that is not on your list, dispersion between your names. when RKLB and NBIS start moving together on days with no company news, you are no longer holding three positions, and that is usually the earliest sign that a macro regime is doing the driving.

This is not exactly what you asked for but I feel like is close in spirit. I’ve been using a basket of liquid etfs that cover sp500, internal, developing, oil/energy and bitcoin, and selling ~45 DTE .25-.3 delta puts. Those shortish time horizons keep you moving with the market and won’t totally wipe you out when they do move south. Also I hold most of the cash for these positions in 3month tbills that my broker lets me use as collateral for the puts. As far as indicators, I like trend following mentality. How is the ticker performing vs 200sma, 50 ema vs 200 sma? Last 3 months vs last 6? Just some good for thought