Futures Trading Update

Futures Market Insight w/John Caruso – 05/20/2019

Posted 05/20/2019 11:48AM CTJohn Caruso

Bull and Bear Market

Markets continue to get beat up on trade headlines. China looks awful – making lower lows, and down -0.6% last night. China remains bearish trend. Our view of the short on the small caps looks fine, and traders may wish to hold positions to watch for a drop along 1500. We think you have to beware of any stock rally’s on “tweets” or “headlines” for the time being as we believe they’re likely to be bull traps.

The USD is signaling immediate-term overbought. I don’t expect too much downside on the next downside move – maybe we can get you back along 97.00 in the near-term, but we see a much bigger move happening to the downside in the 2nd half of the year. Why? We continue to think the trade war escalates not only via increased tariffs, but also thru currency manipulation. China has devalued the Yuan vs USD to attempt to gain a trade advantage, hence why we think the President’s economic team has stepped up the “interest rate” cut rhetoric in recent weeks and we expect that to continue (especially with the headline growth data likely slowing for the next 2-3 quarters). I actually believe they will signal a rate cut as we head into the Jackson Hole Symposium in August. We’ll see. Eventually currency traders will take the hint and begin to unwind their USD vs Foreign crosses. Of course this all bullish for Gold and Silver prices if we are correct.

Gold / Silver: took a bit of beating last week and we’re really watching that key 1266 swing level in Gold. A breach of that key level will make me rethink our analysis on Gold over the near-term.

Oil: +30 cents and continues to be one of the best places to be in 2019. Iranian geopolitical tensions + The Cycle keeps energy prices bid. Factor in a weaker dollar over the next few months and we could have “cocktail” for $80 crude Oil – big assumption at the moment, but the stars are aligning for higher energy prices – we’ll see how this call ages.

 

Feel free to reach out to John Caruso at jcaruso@rjofutures.com or 1-800-669-5354 if you’d like to get a 2 month free trial of our proprietary trade recommendations by email. 

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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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