Overnight Highlights:

*French PMI misses expectations and decelerates m/m to 49.0 vs 53.7 Forecasted and 52.4 previous

*Eurozone PMI misses expectation decelerating m/m to 51.7 vs 52.9 forecasted and 51.8 previous

Global Equities:

*US Futures indicating a lower open led by the Small Cap Russell 2000 Index -0.88%

*Europe lower across the board, led by Germany -1.08%; France -1.09%; Italy -1.25%; and Spain -1.12%

*Asian Equites largely higher across the board with the Shanghai Index +0.50%

Top Market Movers Overnight


*Following an attempted break to higher levels from the “hawkish” Fed Minutes release, the 10yr yield has slumped back 10bps to 0.62%

*Treasuries catching a bid on a “risk-off” morning in Global Macro Markets

*OPINION: We’ll continue to trade Treasuries with a “Bullish Bias” until our quant signals suggest otherwise – NOT A BUY RECOMMENDATION FOR TODAY

*Our range analysis suggest covering some treasury exposure today as we’re now immediately triggering “overbought”

US Dollar:

*Gaining some fervor overnight off of the weak European PMI data and a flight to safety bid off of a weaker US Equity Open

*We contend there’s a small window for the dollar to rally, however it shouldn’t get too far.  Upside to 93.90 in our model



*Trading lower overnight, retesting some immediate-term trend support at 1915.00 in our model with downside to potentially 1895.00

*Held back by a stronger USD, and a general “risk-off” outlook headed into the day

*OPINION: Gold is in the “Buy to Accumulate” Zone in and around the 1915-1895 level  

*Gold remains BULLISH trend on all time frames coupled with BULLISH momentum, but momentum appears to be turning “Neutral”*We largely expect a range bound trade between 1874-2010 until bullish fundamentals reassert themselves.

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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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