One top RBC strategist says OPEC will have to dig deeper to solve crude oil's oversupply problems. » Read More
One strategist says the markets will grind higher this year, but only if the biggest "enemy" to the market doesn't materialize. » Read More
Ralph Acampora, also known as the godfather of technical analysis, says a pause in the rally is coming. » Read More
The Northman Trader Sven Henrich is back, and he's got two charts that show a pullback could be coming for the market. » Read More
The oil market is sending signals that it wants OPEC to not only extend production limits when it meets this
Slashing production below levels agreed to in November would threaten OPEC members' hold on key markets like Asia, which has lately turned to U.S. exports to fill the gap. It would also require another round of negotiations, following the contentious dealmaking that yielded last year's accord.
"I think they had a hard time getting this deal together, and I don't particularly think that most of the OPEC countries want to cut
"Now they're going to cut another couple thousand [barrels]? And how are they going to divvy that up?"
OPEC agreed to take 1.2 million barrels a day off the market through the first half of 2017. An agreement with 11 other exporters including Russia ratcheted up the cuts to about 1.8 million barrels a day.
Crude is on track to double its price per barrel, according to one technician whose bold call had CNBC's "Futures Now" traders scratching their heads this week.
Crude saw its worst day in 2 months this week, plunging more than 4 percent alone on Thursday. The commodity also dipped below $46 a barrel for the first time since November 30 of last year, and is down more than 15 percent.
Bill Strazzullo, chief market strategist at Bell Curve Trading — who correctly called for crude's plunge to the $30 range back in 2013 — said oil could be on the verge of a massive rally that would send the commodity to levels not seen in three years.
"I think over the next [few years] it's not out of the question that you push $80- to $90" per barrel on oil, Strazzllo said in a recent interview with CNBC's "Futures Now." That's a nearly 100 percent rally from where the commodity is currently trading.
According to Strazzullo, the "dramatic shift in supply and demand dynamics" that sent crude plunging from its high of more than $100 per barrel in 2013 to its low of $26 in February 2016 has created a new normal for the commodity.
"The whole pricing structure has shifted lower. But when you look at the new structure, the bottom is still around $30 a barrel. We think fair value is up around $60, and probably the upper end of the range is $80 to $90," he added.
Along those lines, Goldman Sachs said in a research note that the broader picture for oil "remains supportive" of higher prices despite waning demand from China — one of the most voracious energy consumers on the planet. The bank added that it expects "robust demand growth" in 2017, particularly with OPEC members appearing to hold the line on production cuts.
Strazzullo emphasized that a more positive global economic outlook could boost demand over the next few years.
"When you look at a bigger picture, you still have a situation where you have recovering economies in Europe, and we have a stable economy here that should be on the mend," explained Strazzullo. "So you still have pretty good demand going forward."
Volatility is sitting near its lowest levels in years, but one technical strategist says that if history is any indication, the so-called fear gauge is signaling a market breakout.
While the VIX hit a 10-year low Monday, Bank of America's Stephen Suttmeier said that it's the chart of the VXV-to-VIX ratio that points to a rally ahead for stocks.
The VXV is an index similar to the VIX, but it measures expected volatility over the next 93 days. In other words, it is a longer version of the VIX index that tells where the VIX is expected to go.
"When the VXV to the VIX goes from oversold to overbought really fast, [which has] happened about four times in the last year or so, the market tends to break out," Suttmeier explained Tuesday on CNBC's "Futures Now."
The strategist points out three key points through 2016 to illustrate his thesis. The VXV-VIX ratio first rose rapidly in February 2016, when the S&P 500 broke out above 1,950. The second time the increase occurred was right after the Brexit vote, following which the market went through 2,100. The third and final time was right after the election, when the S&P broke above 2,200.
And now, with another rise in the VXV-VIX ratio in April, Suttmeier thinks that the trend "favors a breakout through 2,400."
As a result, Suttmeier believes the S&P 500 could run up as high as 2,500 in the short term.
On the same segment, "Futures Now" trader Brian Stutland shared that data going back to 1991 showed that the VIX typically trades back above 16 within half a year after falling below 12. This is based on a Bollinger Band analysis, a volatility indicator with an upper and lower line that indicates whether an asset is overbought or oversold.
Stutland says that the VIX has yet to hit the lower Bollinger Band, which would indicate that the VIX is oversold. But once it does, there could be a spike higher in volatility.
The VIX index has hovered around 12 for most of the year so far.
The stock market rally could be losing its muscle.
A top strategist at Russell Investments is warning investors that strong earnings are not enough to keep stocks at record levels — and there's nothing Federal Reserve Chief Janet Yellen or President Donald Trump can do about it.
"We are surprised at the resilience of the U.S. market. We recognize it's been a good earnings season," said Mark Eibel, the firm's director of client investment strategies, on Tuesday's "Futures Now." "You're really kind of banking on earnings staying or improving at this level particularly in light of the Fed raising rates at least one more time this year and until some policy gets through the administration."
The Nasdaq has been the biggest winner. The index has rocketed 17 percent since the election, and broke the 6,000 level for the first time ever last week. It's registered all-time intraday highs 29 times since just Jan. 1.
Wall Street has viewed Trump's business-friendly policies as favorable to stocks and the economy. If the majority of his legislation makes it through Congress, Eibel argues a lot of the gains could already be priced into the market.
"Until some of the promises are fulfilled, you are kind of left with earnings," added Eibel.
"The struggle moving forward from here is we know we are rolling off easy comparables from a year ago particularly in the energy space. So we won't have that moving forward as much through the rest of the year."
Eibel also points to the first quarter's disappointing gross domestic product numbers and softer U.S. consumer spending as catalysts which could slow the rally, and cause stocks to move "sideways" or even "downward."
The most effective way to keep profits growing would be to look abroad, according to Eibel.
"We just seem as if we're priced for perfection here — where around the rest of the globe, you can get the same kind of story. There are politics everywhere. And with an improving political situation in Europe, you get cheaper stocks," he said.
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David Stockman has a stern message for investors: They're living in a fantasy land about Trump.
In a recent interview on CNBC's "Futures Now," the former director of the Office of Management and Budget under President Reagan said that "Wall Street is totally misreading Washington," and President Trump's promises of tax reform will be "dead before arrival."
The president is "essentially a 70-year old kid in a candy store who wants one of everything: More for defense, veterans, border walls, law enforcement, infrastructure and 'phenomenal' tax cuts, too—without the inconvenience of paying for any of it," said Stockman.
Of the proposed tax bill announced this week, he said, "It's a wonderful fantasy…but there's no way to pay for the $7.5 trillion cost of the main features."
The White House announced a one-page tax reform plan on Wednesday, and some of the points Stockman highlighted include: Three tax brackets, double standard deduction and the reduction of corporate and non-corporate business taxes down to 15 percent.
In a research note this week, Goldman Sachs pegged the cost of the tax plan to just under $5 trillion, when factoring in key changes such as repealing of the state and local tax, and a 35 percent top marginal rate instead of 33 percent. Goldman analysts expect the tax bill is "fairly likely" to become law, but warned progress could be slow.
"I like [the tax plan] but you have to pay for it either with a new tax like the border adjustment tax, which is dead, or spending cuts which Trump has ruled off the table," Stockman explained. "What you have down there is a total fiscal calamity that is going to basically dominate Washington."
Stockman expects a "constant fiscal crisis and stalemate" in D.C., which will ultimately delay the "good stuff," like a tax cut, from ever happening.
Of Trump's first 100 days in office, Stockman again referred to the White House as a "pop up store giving out candy before the 100th day to say they've accomplished something." Adding, "this isn't a serious plan, it can't be done. And I think it's only indicative of the huge trouble that's brewing down there in the beltway."
Despite Trump's somewhat tumultuous first few months in office, the stock market has been resilient. The S&P 500 Index is up 11 percent since the election and 5 since the inauguration, the third best performance under a new administration since World War 2. On Friday, the S&P traded within 1 percent of its all-time high.
Eventually, however, Stockman expects the drama in D.C. to trickle into equities, sparking a significant pullback.
"I don't know what the stock market is thinking but if they have faith in a giant fiscal stimulus and tax cut then it's a delusional faith that's going to be badly disappointed and I think fairly soon," he added.
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