February 21st, 2020 - Issue #1000
In This Issue
1. 1000th Special report: How the "Fed Juice" affects the markets?
2. 1000th issue special, FREE tools, resources and more!
3. Economic Calendar
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1. 1000th Special report: How the "Fed Juice" affects the markets?
For years, I have been voicing my frustrations with my colleagues in terms of what I think happened after 2008. It seems to me that the fed, since the 2008 crash, feels like it's job is to support the stock market....not sure when this happened but that is how I personally feel. In return, stock indices and other markets simply don't react as well to traditional trading methods and technical analysis. Instead they react to the FED... So for our special 1000th issue of our newsletter, I decided to share the following valuable article by my colleague and client, Shane Smoleny about the “Fed Juice”, how it affects the markets and perhaps how instead of us getting frustrated, maybe learn to follow the juice......
Background: Shane Smoleny is registered CPO and CTA. He has a bachelor’s degree Mechanical Engineering and master’s degree Biomedical Engineering. He was a Physics instructor for 12 years and applies these principles to develop models for financial markets. He is seasoned financial market research analyst who has created a variety of market tools to get an understanding of what's really going on in today's fast-paced markets. These tools include technical analysis, planetary cycles, planetary speed index, and of course the Fed Juice. He provides a daily trading newsletter where he posts information on 10 different commodity markets daily (including the Fed Juice).
Since 2009 Its a "Whole New (Fed) World"
Retail trading has exploded in popularity since the 2009 market lows. We have seen an unprecedented bull run for almost 11 years now. But what most people don't realize is that the Federal Reserve is completely responsible for this rally. In 2008 as the market was approaching lows the Fed began experimenting with increasing their balance sheet (QE 0). But in 2009 they began the “official” purchase program of US Treasuries and Mortgage-Backed securities known as Quantitative Easing (QE 1). Ever since that point, the market has shifted in its basic character. Traditional measurements such as sentiment, technical analysis, seasonal patterns, and market cycles have shifted. This is why it is absolutely critical to have an objective measurement of the Fed's daily activity and its impact on the markets. This is why I created the "Fed Juice" which tracks this exact influence on the markets. For some, it is hard to believe that central banks can have such a strong influence on markets. However, when we look at the markets in terms of the Fed Juice the relentless rally in markets begins to make sense. Below is a weekly chart of the S&P 500 (white) vs the Fed Juice (red). The Fed Juice is surging to all-time levels and the market is following.
See the Chart, finish the article
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3. Economic Calendar
Source: Moore Research Center, Inc.
| Date | Reports | Expiration & Notice Dates |
|---|---|---|
| 02/21 Fri |
7:30 AM CST - USDA Weekly Export Sales
9:00 AM CST - Existing Home Sales(Jan) 2:00 PM CST - Cattle On Feed |
LT: Feb Nikkei Options(CME)
Mar 2,5,10 Year Notes Options(CBT) Mar Bond Options(CBT) Mar Canola Options(CBT) Mar Wheat Options(CBT) Mar Corn Options(CBT) Mar Oats Options(CBT) Mar Rough Rice Options(CBT) Mar Soybeans,Soymeal,Soyoil Options(CBT) Mar Orange Juice Options(ICE) |
| 02/24 Mon |
2:00 PM CST - Cold Storage(& Annual)
|
FN: Mar Cotton(NYM)
Mar Crude Lt(NYM) |
| 02/25 Tue |
8:00 AM CST - FHFA Housing Price Index(Feb)
8:00 AM CST - S&P Case-Shiller Home Price Index(Dec) 9:00 AM CST - Consumer Confidence(Feb) 3:30 PM CST - API Energy Stocks |
LT: Mar Copper Options(CMX)
Mar Gold & Silver Options(CMX) Mar Natural Gas Options(NYM) Mar RBOB & ULSD Options(NYM) |
| 02/26 Wed |
6:00 AM CST - MBA Mortgage Index
9:00 AM CST - New Home Sales(Jan) 9:30 AM CST - EIA Petroleum Status Report 2:00 PM CST - Dairy Products Sales |
LT: Feb Copper(CMX)
Feb Gold & Silver(CMX) Feb Platinum & Palladium(NYM) Mar Natural Gas(NYM) |
| 02/27 Thu |
7:30 AM CST - USDA Weekly Export Sales
7:30 AM CST - Initial Claims-Weekly 7:30 AM CST - Durable Goods-Ex Transportation(Jan) 7:30 AM CST - Durable Orders(Jan) 7:30 AM CST - GDP-Second Estimate(Q4) 7:30 AM CST - GDP Deflator-Second Estimate(Q4) 9:00 AM CST - Pending Home Sales(Jan) 9:30 AM CST - EIA Natural Gas Report 2:00 PM CST - Trout Production 3:30 PM CST - Money Supply |
FN: Mar Natural Gas(NYM)
|
| 02/28 Fri |
7:30 AM CST - Personal Income & Spending(Jan)
7:30 AM CST - PCE & Core PCE Prices(Jan) 7:30 AM CST - Adv Intl Trade In Goods(Jan) 7:30 AM CST - Adv Retail Inventories(Jan) 7:30 AM CST - Adv Wholesale Inventories(Jan) 9:00 AM CST - Univ of Michigan Consumer Sentiment-Final(Feb) |
FN: Mar Copper(CMX)
Mar Gold & Silver(CMX) Mar Platinum & Palladium(NYM) Mar 2,5,10 Year Notes Options(CBT) Mar Bonds Options(CBT) Mar Wheat Options(CBT) Mar Corn Options(CBT) Mar Oats Options(CBT) Mar Rough Rice Options(CBT) Mar Soybeans,Soymeal,Soyoil Options(CBT) LT: Feb Bitcon(CME) Feb Black Sea Wheat(CME) Feb Fed Funds(CME) Feb Live Cattle(CME) Mar RBOB & ULSD(NYM) Mar Sugar-11(ICE) Feb Black Sea Wheat Options(CME) Feb Fed Funds Options(CME) Mar Lumber Options(CME) |
| 03/02 Mon |
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| 03/03 Tue |
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| 03/04 Wed |
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| 03/05 Thu |
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| FN=First Notice, OE=Option Expiration, LT=Last Trade | ||
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!
