European/USA Stimulus- European officials passed a historic stimulus bill in the amount of 750B Euro, more than half of the money will be issued as grants rather than loans. Not much of a reaction in the Euro vs USD pair, likely because the U.S. is expected to pass a $1T bill this week. On that topic, all eyes will be on the House and Senate today, as there are rumors suggesting that the House (Dems controlled) and the Senate (Republican controlled) are still far apart in their negotiations. Despite the impasse, a deal is expected at some point.

Stocks/Volatility-   A breakdown in our 2 key volatility indices, the VIX and the VXN – both breaking to bearish trend. We’re agnostic about markets and recognized this possibility last week and pulled the plug on our equity shorts (the Russell). Of course this doesn’t mean we won’t signal short again, but we’ll wait and watch for now.  There’s plenty of risk still out there. U.S., Europe, Asian equities all stretching higher across the board.

Metals- Rocket ship higher on the news of stimulus in both Gold, but more so Silver this morning. Silver 5.50% this morning. Copper +0.63%.  All signaling immediate term overbought….but that hasn’t meant much lately. Perhaps the impasse in congress could knock these markets back some and provide some entry points.

Full steam ahead on Scenario 3 – Growth slowing/Inflation accelerating. 

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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