Bull and Bear Market

Ugly data out of China and the US.  Chinese Industrial Production and Retails Sales slowed in April and will likely slow again when we see the May data released of course in June.  US Industrial Production slowed the most in 2yrs -0.5 vs -0.1% Prior and Retail Sales (US) slowed -0.2% vs 1.6% Prior.  China is now back in a Growth slowing set up within their economy and as aforementioned we expect this to exacerbate as the trade war continues thru May/June.

The former Goldman Sachs Chief – Lloyd Blankfein was out this morning in support of Trumps stance on trade with China:

Lloyd Blankfein‏Verified account @lloydblankfein 16 hours ago

Tariffs might be an effective negotiating tool. Saying it hurts us misses the point. China relies more on trade and loses more. As in a labor strike where mngmnt & workers both get hurt, the process may demonstrate relative strength & resolve & where compromise needs to happen.

Lloyd Blankfein‏Verified account @lloydblankfein 14h hours ago

As to who ultimately bears the tariffs cost: US buyers may eventually switch their purchases to domestic or non-Chinese companies (and pay a bit more than now). Chinese companies lose the revenues. Not great but part of the process to assert pressure to level the playing field.

I think it’s safe to say that Trump won’t bend the knee to Xi on trade as support seems to be gathering steam from Wall Street. 

30yr US Treasuries +0.46% and 10yr Notes +0.31% this morning. 

Oil: we’ll obey the Oil/Energy signal for cues on inflation going forward.  Oil remains bullish trend, but clearly suffered some major chart damage in recent weeks.  Large builds in inventories in yesterday API release (+8.6m bbls) – EIA survey is out today at 9:30am.


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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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