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Trading Coach - Actionable Market Levels - Apr 9 2019


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Actionable Levels:

Market

Trend

Range Low

Range High

SP500

Bullish

2796

2919

VIX (Cash)

Bearish

12.60

16.40

OIL

Bullish

60.10

65.00

GOLD

Bullish

1285

1316

10YR (Yield)

Bearish

2.334

2.55

Oil has pressed to +42% YTD signaling immediate-term oversold, but momentum keeping the bulls in charge. Oil is one of the best long exposures you can have in a Growth decel/Inflation accel environment, BUT please dont buy it here of course.

US Equities- low volume melt up continued last week. Yesterday volumes were down -16% vs the 1 month avg. There is NO conviction behind this rally, but price action remains bullish on a 3-6 month duration for the SP500 and Nasdaq, while the Small Caps via Russell 2000 remain bearish trend (3-6 month basis). The Russell is also carrying an implied volatility discount of -18% vs 30 day realized. A classic complacency signal.

If you bought Gold alongside us last week on the pull-back, congrats on executing. We buy what we like based on how it fits in to the context of our cycles analysis at the low end of our trade range. China raised Gold reserves in March by 11.2M Tons to 60.2M in reserves Bullish

Bonds: The IMF was out this morning downgrading global growth something weve been preaching since last Sept. The 10yr yield is still sitting close to the top of our range at 2.50% this morning with the Fed Minutes on deck and 3 consecutive days of Powell speeches.

Sign up for our Daily Fundamental Market Insights and Emailed Trade Recommendations by selecting the Link Below:

https://rjofutures.rjobrien.com/trading-offers/trading-coach-insights/?cid=70144000001J1zYAAS

Trade with the trend are words commonly echoed by professional traders. At what price does one sell in a bearish trending market and at what price does one buy in a bullish trending market? The Market Navigator is intended to provide guide posts to identify those price levels.

How to use our strategy:

Guidelines

The rules based strategy is simple.

If a market is in aBullishtrend a trader should only be looking to participate as abuyerand only at thelowend of the range.

If a market is in aBearishtrend a trader should only be looking to participate as asellerand only at thehighend of the range.

If a market is in aNeutraltrend a trader should be looking to participate as abuyeronly at thelowend of the range OR as aselleronly at thehighend of the range.

Trend

Determining how a market is currently trending depends on the time line. I typically track markets on both a monthly and weekly timeframe to identify trend bias. In my experience, studying market price, action, and behavior, Ive observed that markets that trend bullish or bearish on a 3-month timeline tend to hold that posture for an extended period of time.

With this in mind, all markets have the tendency to revert back to the mean, whether bullish or bearish trend. In other words, you get bull market dips that create buying opportunities, and bear market rips that create selling opportunities.

Range

Trading ranges are determined by an ongoing tug of war on price levels between buyers and sellers. The top end of a range is typically where buying pressure has run out of steam and the number of sellers overwhelms the market and pushes it lower. Conversely, the bottom end of a range is typically where selling pressure has run out of steam and the number of buyers overwhelms the market and pushes it higher.

Range trading with the trend enables one to participate in a market with predefined entry target levels while keeping the overall bias in sync with the market trend. My proprietary trading range levels can be viewed as support and resistance levels, however unlike traditional static support and resistance, my levels update on the open and close of the market and may be different each period depending on market volatility. The levels factor in both the medium term and near term price action.

Use these levels to help manage market swings and risk. Remember, the amount of risk that you accept is the only aspect of the market you control.Sign up for a free 2 week demo of ourRJOF PRO Trading Platformand John Caruso will include you on his daily email distribution during the trial period.

This material has been prepared by a sales or trading employee or agent of R.J. OBrien & Associates, LLC and is, or is in the nature of, a solicitation. This material is not a research report prepared by R.J. OBrien & Associates, LLC Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions. DISTRIBUTION IN SOME JURISDICTIONS MAY BE PROHIBITEDOR RESTRICTED BY LAW. PERSONS IN POSSESSION OF THIS COMMUNICATION INDIRECTLY SHOULD INFORM THEMSELVES ABOUT AND OBSERVE ANY SUCH PROHIBITION OR RESTRICTIONS. TO THE EXTENT THAT YOU HAVE RECEIVED THIS COMMUNICATION INDIRECTLY AND SOLICITATIONS ARE PROHIBITED IN YOUR JURISDICTION WITH REGISTRATION, THE MARKET COMMENTARY IN THIS COMMUNICATION SHOULD NOT BE CONSIDERED A SOLICITATION. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Trading advice is based on information taken from trades and statistical services and other sources that R.J. OBrien & Associates, LLC believes to be reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgement at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitabl



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About the author


John began his career 15 yrs ago at Wilshire Quinn Capital, a Wealth Management Firm based out of Los Angeles, California. John first began to interpret different market strategies and ideas as an individual investor at the tail end of his college years. By 2004 he was opperating one of the largest retail books at Wilshire Quinn Capital.  In 2006 John moved to Chicago based Lind-Waldock where he began to expand his knowledge and hone his trading skills in the futures industry. He joined RJO Futures in 2011.

John's focus is to identify and service the needs of each and every one of his clients and suggest investments based on those needs.  John has a very unique way of interpreting markets, focusing on broader economic trends based on growth and inflation metrics.  His technical study is also unique, which combines a proprietary market range calculation and charting trends across multiple durations.  

Contact Info:

John Caruso

Senior Market Strategist

jcaruso@rjofutures.com

312-373-5286

Twitter: @JCarusoRJO

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