More Scenario 2 – Growth/Inflation Accelerating, stay the course.

US Dollar: can’t pick its head up for more than a day.  We’ve entered a secular bear market, and we don’t expect any significant upside until the market pivots on the economic cycle.  If you have not noticed, the devalued state of the USD continues to fuel inflation expectations, and burgeoning risk taking in risk assets (Stocks and Commodities).  Bears beware here however, the USD short position has exploded to “overcrowded” levels – the most since 2006.

10yr Yields: We’ve now broken through the 1.00% fence line on the news last night/this morning.  We think their could be more significant downside in bonds/upside in yields to come – hold a core position, and trade around it.  selling at the top end of the range of bonds (low end in yields), trimming at the low end, rinse and repeat.  A significant low in Bond yields (top in Bonds) has likely formed for many years to come.   

Inflation Accelerating: do you really need an economist to come on TV and tell you that we’re experiencing inflation?  Our commodity index continues to carve out new cycle highs. 

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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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