Following a bounce to “lower highs” overnight in stocks, we’re right back down where we closed yesterday. US ADP Employment was released this morning printing 117K vs 200K exp private payrolls released. I’d say at the moment, I’m “renting” a short side view – we’re still bullish on the cycle, but have recognized that some of our tools are reading immediate OB. Bull market’s correct on the downside, bear markets correct on the upside, but the cycle ultimately leads the way for extended periods. There’s a brief period of about 1.5 weeks for us to correct, but we ultimately will likely buy that correction in month end/quarter end. 

One of our indicators flashing “caution” for the bulls yesterday was the decrease in the IVOL premiums day/day and week/week.

Current IVOL set-up:

SPY 2% vs -2% yesterday vs 24% last week (a 22% decrease from last week)
NQ 9% vs 4% yesterday vs 36% last week
RTY 23% vs 14% yesterday vs 42% last week

-if you need further explanation of how we use IVOL for sentiment, please reach out directly. 
*Yields, back up.  1.47% in the 10yr yield, with immediate upside to 1.55%. 
*Dollar reversed the reverse this morning, likely trading alongside rates.  Back hovering around 91.00.  We remains bearish on the USD for the moment. 
*Metals back down this morning, with the reversal higher in the Dollar.
Not too much more to discuss other than waiting for Friday’s Non-Farm Payrolls data, and then of course headline CPI next Tuesday. 

Good luck out there,

Today’s Ranges:

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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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