RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Global Equities

*Europe with a big night. GER and FRA leading charge, both up more the > 2.00%. 

*US Equity Futures also putting on a show with the NASDAQ plowing to new all-time highs in the futures overnight, +1.19%. 

*SP500 and NASDAQ remain bullish trend, and the Russell 2000 still bearish trend, still lagging the majors. 

*Shanghai slipped a bit overnight -0.17%, still bullish trend.  We may signal here, I’m going to look into the Chinese A Shares Index.  Stay tuned

*US Small Caps via the Russell 2000 triggering immediate OVERBOUGHT this morning.  

Stock Market OPINION:

*We’re getting “there” in terms of over exuberance in equities in our opinion. Stock splits (which add no fundamental value to the companies themselves) are typically met with consolidation and corrective periods soon to follow, sure enough this was NOT the case for AAPL and TSLA, as smaller investors found there way into those stocks Monday and Tuesday.

*Keep a close watch on Implied Volatility.  The VIX index has been “sneaky”, as has been the VXN (NASDAQ Vol), with both rising in recent sessions to near “break out” levels.  This is something to monitor closely. 

*The trend and momentum in the SP500, and NASDAQ are very powerful, and any corrective dips of 3-5% will likely be met with STRONG buying interest in my opinion. 

Top Market Movers

Currencies
*A continuation counter-trend bounce higher in the US Dollar overnight vs the major foreign players.  USD remains bearish trend, and we’ll be hunting for “Short” opportunities here. 

*Did you know…The USD has carried a nearly 1 to 1 inverse correlation to US Stocks since May/June.  So if you need any questions answered in terms of “fuel” for the stock rally, its been the weakening/devaluing of YOUR PURCHASING POWER. 

*The Japanese Yen is looking more and more interesting as it approaches immediate-oversold territory vs the USD

Metals
*Gold correcting on the bounce in the USD – will likely be met with buyers closer 1940-1920 zone.  Low end of our range comes in at 1919.00.  Likely to swing in $100 range in the near-term. 

*Silver similar to Gold – likely trapped in a wide range.  Be careful “chasing” this market higher.  Look to buy or add to positions closer to the low end of our range 26.90

Treasuries
*Not much to speak of here. Little change in the treasuries bonds/yields overnight following a slide back under 0.70bps on Tuesday

*I’d say a better than good chance we pull our 10yr profits off the table today – as the yields do look like they may attempt to sneak into a higher trading range moving forward.

*Another contributing factor to a “higher Dollar” and lower Gold prices this morning. You must understand this correlation to do Macro IMO. 

Agriculture
*Lean Hogs had a decent bounce yesterday, putting our position in the profit zone.  Chinese demand continues to be a motive for higher protein prices

*Corn and Soybeans slipped last night, likely a modest correction from their big run higher over the past 3 weeks.  We’re hunting for immediate oversold/buy signals here.

Data Due Up:
ADP Jobs Report at 7:15 CST
UPDATE: 428K vs 1.00M Expected

Thursday:
Jobless ClaimsISM
Non-Manufacturing

Friday:
US NFP Payrolls at 7:30 CST
exp 1.4M Payrolls added and a 9.8% UE rate

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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. Prior to becoming a broker he did some individual trading on his own, where he first began to study and interpret different market strategies and ideas. In 2006 John moved over to Lind-Waldock where he began to service clients as a professional broker. He joined RJO Futures in 2011.
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