Futures Market Insight w/John Caruso - 02/12/2019

February 12, 2019 10:38AM CST

Bull and Bear Market

Markets are rallying in early trade session on the odds of a second government shutdown being averted – Congratulations to the monkeys in D.C. (I suppose). Government deals, and Dovish Fed remains the Markets #1 catalyst to test higher ground – chew on that for a second. Remember, the longer we can extend the U.S./China trade deal/negotiations, the longer the market can rally on the “hope” of a deal. Cycle risks are still prevalent as nothing has changed.  There’s even more cycle risks that are mounting in terms of Q2 projected earnings and the effects of the strong dollar on corporate profits.  Implied volatility signal in the S&P 500 collapse last Friday from -50% to -19% yesterday – our range suggests immediate term upside to the recent highs – where we’ll likely look to get more aggressive in shorting US equities.  Also, remember we didn’t get a Q4 GDP reading in Jan when we were supposed too – we’ll get that number out at the end of the month which we think will carry a 1 handle (1.75 q/q SAAR). 

Oil- Inflation to bottom in Q1 2019 is our call right now.  This would be a catalyst for higher Oil prices coupled with OPEC headlines and their efforts to stabilize prices in an around $50.00 bbl.  Oil catching an aggressive bid this morning +3%.

10yr Yields- we’ll look for 2.75% again to send you another buy signal on the 10yr Notes (as the growth cycle continues to slow)

Gold- still one of our favorite macro positions as we’ve got a dovish US FED and ECB.  For those that don’t want to buy USD w/ a dovish Fed nor Euros with Italy and potentially France driving into a recession, Gold remains a logical fan favorite. 

WED: CPI Reported, Mester and Bostic Speak

THURS: PPI Reported, Retail Sales, Jobless Claims

FRI: MFG Survey, Industrial Production, Consumer Confidence

Gotta run, good luck out there today

 Actionable Market Ranges:

Market

Trend

Range Low

Range High

Notes

 

 

 

 

 

SP500

Bearish

2618

2752

approx 1% upside potential?  w/ 10-15% downside

Nasdaq Comp

Bearish

6929

7232

 

10yr Yield

Bearish

2.61%

2.75%

 

VIX

Bullish

14.94

20.67

 

Oil

Bearish

51.33

54.45

Inflation bottoming?  We think so in Q1 into Q2

Gold

Bullish

1301

1338

 

USD (Cash)

Neutral

94.92

97.26

 

EUR/USD

Bearish

1.13

1.15

Impending recession, dovish ECB = be long of Gold

USD/JPY

Bearish

1.08

1.106

Immediate-term OVERBOUGHT/OVERSOLD in Futs

 

Feel free to reach out to John Caruso at jcaruso@rjofutures.com or 1-800-669-5354 if you’d like to get a 2 month free trial of our proprietary trade recommendations by email. 

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