RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Global Equities:
USA: SPY +0.38%, NQ +0.46%, RTY +0.36%

EUR: GER +0.25%, UK +0.08%, FRA +0.78%

ASIA: Shanghai +0.10%, KOSPI -0.56%

Following yesterday’s route in global equities, we’ve got some green lit up on the board in the pre-market as US and European equities signaled immediate oversold yesterday.  SPY, NQ, finished down -1.9% and -1.6% respectively. 

Volatility- the VIX and VXN (SPY/NQ vol indices) both climbed substantially yesterday – one of the reasons I was hesitant about slapping on longs. > 30 VIX can be a nightmare for stock bulls, and with election volatility on deck and narratives running loose on the inter-webs, it’s wise to exercise caution.   

Commodities: oversold bounces in oil, and copper overnight. Copper is still carrying bullish momentum, and immediate oversold this morning, while crude oil broke from bullish to bearish momentum yesterday – usually a rarity that momentum didn’t neutralize first.  40.00 has been the median price for crude since early Sept, and we’d expect another test (and eventual push through), but we remain agnostic to all markets. copper has immediate-term upside to 3.17.

Gold/Silver – not doing much this morning, we still think the set-up favors another run higher, but may be short lived into year-end as the market repositions for Q1 2021 that could bring many upside surprises. 

I remind you we’re still in the early innings of Q4 and we’ll continue to position for more Stagflation until our quantitative signals suggest a change. 

Are you struggling with the current tape? If the answer is yes, that’s ok. Stocks went from immediate overbought to oversold, in matter of 2/3 sessions. Volatility is non-trending, and fractal The one thing I’ve noticed is that the momentum trade is dead, for now at least. Rally’s that get started and then stop and reverse. This action is everywhere. I’ve sent out a paltry 4 trade signals this month vs 15-20 on an active month, and have been playing small until a clearer path reveals itself to me. Drown out the noise, and be careful in this tape, there’s plenty of trap doors out there. 

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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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