RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

For the newcomers, this is what Scenario 4 Growth/Inflation slowing looks like….

Dollar up
Bonds up
Interest Rates down
Risk Assets down

We discussed the rising probability of the this set-up headed into Q4 2020 all of last week. While we still don’t fully know the answer to whether its Scen. 4 or Scen. 3 in Q4 – we’ll just keep going with our compilation of signals, both fundamentally and quantitatively.  The glue that’s holding everything together is the debasement of the US dollar. Last week the dollar was signaling higher lows, and a rising probability that it was going to stabilize here in the lower half of our range. That’s proving correct this morning. We’re within an economic backdrop of “when the dollar goes up, risk assets go down”. Why do you think Powell and Mnuchin are so desperate to devalue the “buck”. Hopefully after following us for several weeks, you’ll come to realize there’s a method to all this madness. Now I could go into a myriad of reasons listed by your mainstream financial sources as to why stocks are down this morning, the FinCEN Files, Tik Tok, Ruth Bader Ginsburg, COVID returning to the UK, etc – you can always point to something after the fact, but the bottom line is that there’s a rising probability of another Growth/Inflation slowing backdrop on a 1 and 2yr look back in Q4 2020. A mentor of mine once told me “do macro, before macro does you”.  

Global Equities
USA:   SP500 -1.86%, NQ -1.60%, Russell 2000 -2.64%

EUR: GER -3.26%, FRA -3.15%, UK -3.31%, SPA -3.01%, ITA -3.09% and I could keep going

ASIA: -0.63%, KOSPI -0.95%


*Oil -2.52% this morning.  I’m glad we went with the “signal” and didn’t cow tow to the threats issued to speculators from Saudi Oil Minister Bin Salman last week. 

*Gold -1.90% to 1924. Gold should hold up “better” than most hard assets within this backdrop, so stay tuned in for what we do next here. 

*Copper is holding up this morning, as 70% of demand comes from China – China remains in Scen 2, which those of you that know, is a much better economic backdrop. 

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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. 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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