Futures Trading Update

Futures Market Insight w/John Caruso – 12/04/2019

Posted 12/04/2019 10:07AM CTJohn Caruso

It’s not a coincidence that trade anxieties get ironed out quickly! Yesterday the deal was falling apart and likely not going to happen until after the election, today negotiations are going very well. The very “timely” placed headlines are not a coincidence. This plays very well within the context of our model and Econ Scenario 3. The 10-yr yield swung from the low end to the top end of the range (1.70-1.85) in 24hrs! And it looks like its on its way back down with the uptick in the commodity re-flation trade!

S&P 500: bounced nearly perfectly off the low end of our range – coupled with the timely news on trade. This is a traders dream market! The VIX swung to nearly 18 yesterday and is now getting pancaked back under 15. 15 is and has been our bull/bear line for equities. Bullish equities below 15; Bearish Equities above 15.

Energy: blowing higher after the “shake-out” on LOW VOLUME. We consider 3 components, price, volatility, and volume when making our range calculations and ultimately our decisions on entries and exits. Look for a surprise at the OPEC meeting (5th – 7th) and the trade to be very “headline” driven. Also, Aramco IPOs tomorrow.  Coincidence on a bounce in Oil?  Doubtful.

Metals: pulling back some here. Gold signaled immediate-term overbought yesterday.  We’ll be patient and begin to rebuild our longs soon. Platinum is another commodity we’re looking at closely. The palladium vs. platinum ratio is now 2 to 1. That’s alarming, and extra alarming to auto manufactures of catalytic converters. Platinum looks to be in play headed into year end (this is one I won’t mind being a little early on).

My #1 and 2 indicators on U.S./China relations remains copper prices and the Shanghai Index and NOT the President’s Twitter account.

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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John Caruso

Senior Market Strategist

Follow John on Twitter @JCarusoRJO. John began his career at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John made his move to the commodity industry at the end of 2005, and began his path at Lind Waldock, at the time the largest retail brokerage division worldwide. John did his undergraduate work at Robert Morris University in Pennsylvania from 1999-2003, where he was a 4 year varsity basketball letterman.  A self-professed “Macro Trader”, John uses a multi-factor fundamental and “quantamental” trading model in distinguishing market cycles based upon the accelerations or decelerations of growth and inflation metrics. His technical and quantitative approach is heavily reliant upon trend and market range analysis via a custom built standard deviation system in helping him make probability-based market decisions. John is an avid reader of all things pertaining to finance, and behavioral economics. Click here to sign-up for John Caruso's Trading Coach Insights. Daily information and insight on all futures marketsin ranging from metals to equities.

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