“Where observation is concerned, chance favors the prepared mind.” -Louis Pasteur

Good morning,

Pay attention, and you’ll be able to mitigate chance when it crosses life’s path, is how I’d translate the above quote which of course I came across in Konnikova’s “The Biggest Bluff”. I also remember a quote from legendary golfer Gary Player that is very apropos….”The more I practice, the luckier I get”.  Cool.

Surveying the market landscape this morning…

Stocks are jamming again on the upside – some follow thru on the stimulus party that started Tuesday. The momentum conditions in the SPY has improved, however now carrying an implied vol vs 30 day realized vol DISCOUNT which is a contrarian signal. The Nasdaq however is a different story, still Negative momentum and signaling immediate OB this morning. 

Yields – backing off to 1.50% in the 10yr, throwing bonds into an immediate OB position with negative momentum – we’re not quite at the low end of our range however which is closer to 1.41% this morning. I could begin to layer into the bond market soon (bearish of course).

ECB – released there monetary policy plan this morning, of course leaving the overnight lending rates at 0.00%, and promised to step up their PEPP purchases in months to come (European QE).  This is really not new news – this has widely been expected in recent weeks, hence the drop in the EUR/USD leading up to the  meeting. 

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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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