RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Nothing substantial overnight.  The Chinese Yuan did hit a 16month high vs the USD on stronger reported Industrial Production growth. 

Global Equities:
USA coming in firm today w/ SP500 +0.76%, NQ +1.07%, Russ 2K +0.70%

Europe- firm across the region with GER +0.33%, FRA +0.48%, UK +1.12%, SPA +1.26%

Asia- Shanghai +0.51% and KOSPI +0.65%

*Yesterday’s market breadth was strong, we’ll look for clues today in breadth and volatility as possible near-term direction.  

*Industrial Production due up in the US forecasting +1.0% vs +3.0% prior reading

*The Federal Reserve kicks off its two day meeting today.   

Overnight Futures Markets Snapshot

Metals:
*Gold +0.70% approaching immediate overbought BUT remains bullish trend and is recapturing bullish momentum

*Silver +1.44% to 27.71

*Platinum: +2.02%.  I’m adding this to my list of possible long positions as momentum recaptures the “green” – immediate overbought.  Has upside room to run as its far underperformed the rest of the metals complex.  A retake of 1050 oz would be very bullish for PL.  We’ll of course remain steadfast and look for oversold signals within its bullish trend and bullish momentum set-up. 

*Copper- no surprise the market is gaining overnight fervor from the reported Chinese IP data.  +0.64% but moving into immediate overbought territory. 

Bonds/Yields:
*10yr benchmark upticks to 0.68% – we remain bullish on Bonds, Bearish Yields through full investment cycle until further notice.  Nothing really noteworthy here other than the potential for a move back to a Growth and Inflation slowdown backdrop in Q4 2020 due to high sustained levels of unemployment and a beleaguered US consumer.  We’re not quite ready to go “there” yet, but the probabilities are rising.   

Currencies:
*Chinese Yuan reached a 16 mo vs the USD overnight on the stronger data out of China

*USD- watching the USD closely here for possible stabilization at the low end of the range.  The Fed is not expected to produce anything “new” in terms of policy.  *We remain bearish of the USD until further notice.  A move to Scenario 4 (GROWTH SLOWING/INFLATION SLOWING) in Q4 would put the breaks on the USD – we’re not ready to make that call yet, but as aforementioned there is a rising probability. 

Grains:
*Stay bullish in Soybeans but immediate overbought at the moment.  Chance for 10.25/bushel

*Corn has upside (immediate-term) to 3.75/bushel

Softs:
*Sugar- immediate oversold/still bullish trend, a low is due soon. 

*Coffee- a big wipe-out in Coffee over the last day and a half has coffee immediate oversold this morning – still holding/barely its bullish trend

Execute at the edges within the trend – Good Luck

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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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