RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Bull and Bear Market

Tech wreck – AAPL -20%, GOOG -20%, FB -28%….and the Nasdaq Futures are -15% from peak to trough. It’s getting real hairy out there – you’ve had 2 months to buy U.S. Treasuries at 3.5yr lows. I know it was difficult at the time when CNBC and Jeff Gundlach were slobbering over the “breakout in yields” and the 10yr notes was the heaviest short position on wall st. Not the case any longer – 100K contracts in the 10yr were taken off the table last week to now 357K shorts down from as much as 800K contracts shorts and below the 3 month avg of 595K net short positions. Mind you, there’s still a heavy short position sitting out there, but I do think consensus is slowing moving our way. We are immediately overbought (while stocks are flirting with oversold levels), so I do think it’s prudent to book some gains and replant the position from better prices into year end.

Stocks are breaking last week’s lows as we speak and are staring at 2630 as the next downside support area. I did expect a retest of the recent lows, but thought it might happen in the beginning of Dec. We’re oversold but a re-test of 2600 is on the table. I’m also watching the VIX for an exhaustion signal, which could indicate a near-term low for stocks.

Oil has rebounded, and I do think this is the beginning of a rally phase into year end. I do still expect rallyies to stay trapped inside of 61-62 area. More upside potential than downside potential, in my opinion, over the next 2-3 weeks.

Gold- we still like gold. I’m looking for a spot to toss this back on officially but it hasn’t given us any good entry point opportunities since it slipped back to 1200.00. I do think gold can run to 1250-60 w/ immediate upside potential to 1235.00. I’m looking for 1208.00 as re-entry point for Gold.


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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.
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