Rumor has it there’s a big debate happening tonight in Cleveland, Oh. While we don’t concern ourselves with politics in this space, we’ll be watching for more signs of “printing and spending” from both political parties tonight. It’s not only probable, but at this point it’s inevitable. If there’s one thing I’ve learned over my 17yrs of being around markets, it’s the heightened arrogance of the PhD’s at the Federal Reserve and their thinking that they have the ability to bend and shape economic gravity. It’s the cycle stupid, and it took me only about 9 of those 17yrs to figure that out myself. We’ve all got our own unique way of looking at and analyzing markets, there’s no right or wrong way per se. But it is important that you have a mental process that you go through before making decisions. One of the main reasons I take the time to write this morning market note, isn’t just to keep our traders abreast of our thinking and recent developments but it’s also important for me to get my thoughts and observations sorted out in words to see where I may be wrong, and stay accountable. As for my market analyzing adaptations, all’s that I’ve attempted to do is stand on the shoulders of giants.

There are two most important factors that drive asset class returns – Growth and Inflation” – Ray Dalio (Principles)

While the rest of the Western World will concern themselves with government policy and other various human emotions they fall prey to by both parties, we’ll continue to play the hand we’re dealt with.  Measuring the cycle in terms of where we were and where we’re going.  At some point I’m going to be delving into the idea of MMT or Modern Monetary Theory here, because everything I’ve read up to this point suggests its inevitability regardless of who sits on the “throne” for the next 4yrs to come.  But that’s for another time and place – moving on for now….

Top Mover’s Overnight:

Stocks flat overnight as traders hold steady for the tonight’s “main event”, fully loaded with drug tests. SP500 remains NEUTRAL TREND testing our 3361 topside range overnight before failing.

Dollar down -0.22% to 94.06 – with an immediate-term range of 93.31 – 94.65 BEARISH TREND

Gold flat to higher at 1889 following yesterday’s bounce.  Immediate-term upside to 1930 and downside to 1852 BULLISH TREND

Treasuries: 10yr yield remains coiled in a tight range – 65bps with upside and downside to 63bps and 74bps respectively.

Got a few things to get prepare for before the open today….we’ll leave it right there for now.  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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