This website uses cookies to collect usage information in order to offer a better browsing experience. By browsing this site or by clicking on the "ACCEPT COOKIES" button you accept our Cookie Policy.

Market Outlook: Feb. 16, 2021

Contributor:
RJO Futures
Visit: RJO Futures

By:

Senior Asset Manager

Week/Week Review – Another Scenario 2 week it was indeed….

SPY +1.2%, NQ +1.1%, RTY +2.5%

VIX -7.5%

Gold +0.3%, Silver +0.9%, Platinum +11.0%, Copper +4.4%

USD -0.7%, Euro +0.6%

Oil +4.6%, RBOB +2.5%, NG -0.4%

Do those numbers represent ANYTHING in which you’re watching/hearing about in the evening news or reading about on the “click bait” focused ZeroHedge?  The answer is no.  So I’ll remind you once again, it’s not about what makes headlines news OR drives click bait on the internet (Doom and Gloom sells, and drives ad revenue and “clicks”) – it’s about the cycle!  Growth/Inflation Accelerating. 

Yields

Yields pushing higher – as we’ve been calling for.  We still think the 10yr yield has a long way to go throughout the course of the year!  1.50-1.60 is what we’ve been looking for, but it may be closer to 2.00%.  Short bonds remain a core position.  We’re crushing this trade at the moment, along with our short Eurodollar position. 

Gold

Gold is struggling, Silver, Copper and Platinum aka semiconductor metals are killing it this morning – remember, Gold is a currency and vastly underperforms in Scenario 2.  Not to say that we won’t come back to Gold at a later time, just not at the moment. 

USD

I’ve been waiting for a turn in the dollar, because we believe it may begin to mirror the interest rate markets.  Rising rates = borrowing money more expensive, in turn raising the value of the USD.  I know Fiscal stimulus is highly deflationary for the USD (inflationary for risk assets), but we do see a period of strength for the USD headed into mid-year.  We’ll see if this call comes to fruition, it is a bold outlook based on the amount of liquidity and fiscal stimulus being provided by the Fed and US Treasury. 

Good luck today,

MarketTrendRange LowRange High
    
SP500Bullish38443965
Nasdaq 100Bullish13,44613,962
Russell 2000Bullish21862321
10yr YieldBullish1.12%1.27%
VIXBearish15.8224.65
OilBullish55.1960.43
GoldBearish18011842
USD (Cash)Bearish89.9391.33
EUR/USDBullish1.20061.2156
Bitcoin FuturesBullish38,37451,065

These are proprietary trading ranges from RJO Futures. They are calculated by a customized standard deviation tool.

Originally Posted on February 16, 2021 – Market Outlook: Feb. 16, 2021

Disclosure: RJO Futures

The risk of loss in trading futures and/or options is substantial and each investor and/or trader must consider whether this is a suitable investment. Past performance, whether actual or indicated by simulated historical tests of strategies, is not indicative of future results.

Disclosure: Interactive Brokers

Information posted on IBKR Traders’ Insight that is provided by third-parties and not by Interactive Brokers does NOT constitute a recommendation by Interactive Brokers that you should contract for the services of that third party. Third-party participants who contribute to IBKR Traders’ Insight are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.

This material is from RJO Futures and is being posted with permission from RJO Futures. The views expressed in this material are solely those of the author and/or RJO Futures and IBKR is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation to buy, sell or hold such security. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

In accordance with EU regulation: The statements in this document shall not be considered as an objective or independent explanation of the matters. Please note that this document (a) has not been prepared in accordance with legal requirements designed to promote the independence of investment research, and (b) is not subject to any prohibition on dealing ahead of the dissemination or publication of investment research.

Any trading symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

Disclosure: Digital Assets

Trading in digital assets, including cryptocurrencies, is especially risky and is only for individuals with a high risk tolerance and the financial ability to sustain losses. Eligibility to trade in digital asset products may vary based on jurisdiction.

Disclosure: Futures Trading

Futures are not suitable for all investors. The amount you may lose may be greater than your initial investment. Before trading futures, please read the CFTC Risk Disclosure. A copy and additional information are available at ibkr.com.

trading top