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Market Outlook: Feb. 9, 2021

RJO Futures
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Senior Asset Manager

Commodities: Our Bloomberg Index’ have worked phenomenally since we began our commodity allocation back in June 2020.  +31% in that time frame, and +45% from its cycle bottom in March.  Most commodities on my radar are now signaling immediate OB, so lets start de-grossing that position, so we can reallocate on the pull-backs to the low end of the range. 

Yield Curve: the steepening of the yield curve (2s/10s) has officially gone mainstream.  Same thing, not a bad idea to curtail that position (but leave the core short), so we can reallocate from more advantageous prices.  I’m still of the opinion that this is likely just the beginning of the move up in the 30s and 10s.  The Fed is “in it to win it” in terms of stoking inflation, and they really did say that (in it to win it), and they believe when the time comes, they’ll be able to curb inflation pressures.  Until then, keep feasting on commodities and shorting bonds from extremes of our ranges below. 

US Dollar–  down -0.36% this morning, but giving me an interesting signal.  On the last move higher to the top of our range, the momentum shifted to positive.  So now on the pull back to the low end of our range, the dollar is signaling immediate-term OS, with positive momentum, BUT remains BEARISH trend.  But it’s worth noting that something may be changing in the USD over the immediate/intermediate term.  Interesting – watch the Dollar here is all. 

MarketTrendRange LowRange HighNotes
SP500Bullish38093916IVOL 2% vs 51% w/w
Nasdaq 100Bullish13,25313,768IVOL 0% vs 41% w/w
Russell 2000Bullish21582296IVOL 14% vs 42% w/w
10yr YieldBullish1.07%1.21%1.07 is the absolute worst we can see for yields througout Scenario 2
VIXBearish19.1927.06If VIX breaks 20.00, you could see another leg higher quickly in stocks.
OilBullish53.9758.75Top Scen. 2 long positions, continues to outperform – looking to add at the low end of the range
GoldBearish18021843Moving out of “trouble” right where it needed to last week.  Better to be long Silver/Platinum
USD (Cash)Bearish90.5691.42Immedidate OB with POSITIVE MOMENTUM – watch this, because we may be seeing an intermediate LOW in Dollar
EUR/USDBullish1.19921.2127Negative Momentum – Immediate OB now…maybe turning for a bigger downturn
Bitcoin FuturesBullish36,12048,885massive rip higher over the weekend in BTC w/ 50K in sight – immediate OB

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

Originally Posted on February 9, 2021 – Market Outlook: Feb. 9, 2021

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