RJO FuturesCast

Daily Futures Market News, Commentary, & Insight

Yesterday we saw one of the wildest days on record with the Dow at one point late in the afternoon down 1500 points and the S&P was down about 150 points at its worst levels of the day.  S&P were down about 30 points overnight but has reversed course and is up 24 points currently.  One might ask what the reason for yesterday’s wild ride.  It all stems from years of our Federal Reserve and central banks around the world pumping money into the markets for one purpose and one purpose only, to create inflation.  Rates around the world have risen dramatically in the last few months and the market is now on edge because as rates rise and the fed on course to continue to raise rates, the markets now perceive that the Fed is now behind the curve and we have inflation and now the markets are asking ”what now”.   The Fed and central banks have created this artificial move by pumping money in the markets and we have seen inflation on the rise and now the Fed and central banks are looking like the phrase “deer in the headlights” and the markets are now nervous and the only one to blame is the Fed and the central banks.   

The correction we have seen in the S&P has been around 10%, and my guess is you will see buyers come in with vigor as this is the first major correction we have seen in the S&P in years.   But as volatility ticks up and daily trading ranges have exploded, traders should proceed with caution.   Traders should continue to watch $Yen for near-term direction in stocks as it is a good indicator for movement in stocks and also keep a keen eye on the 10-year note as yields plunged after hitting a yield around 2.82%.  As of this writing, the markets seem to have stabilized and the S&P is trading around 2635.  Trade with caution.

e-Mini Mar ’18 Daily Chart

e-mini_s&p_mar18_daily_chart2

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Greg Perlin

Senior Market Strategist
Greg is a former Chicago Board of Trade member. He was an independent floor trader, pit broker and floor broker with Cantor Fitzgerald. Some of his clients included traders from Morgan Stanley and Lehman Brothers. He also acted in the capacity of desk manager for the morning trade desk. Greg was part of the elite Lind Plus Division for 10 years before joining RJO Futures in 2011.
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