It may not feel like it, but according to one widely used metric, stocks are actually more expensive than they've been since 2005.» Read More
As gold has gotten crushed this year, hedge funds have backed out of the trade, according to Anthony Scaramucci. And the managing partner of SkyBridge Capital, often viewed as one of the most-connected people on Wall Street, believes there will be no reason for them to get back in anytime soon.
"Guys like [John] Paulson are always going to have a steady position in gold," Scaramucci said. "It's a very good diversifier for their overall aggregate personal net worth. But in general, most of the hedge funds have backed out of this trade."
Scaramucci believes that "when they write the history of this period," financial historians will remark that "gold should've worked, it could've worked, it would've worked, but it didn't work in this environment."
He then went on to list the four reasons why it won't get any easier to own gold.
1. Central bankers are exercising caution
Scaramucci notes that investors often hold gold to hedge against an inflationary catastrophe. The problem? The inflationary wolf is not exactly knocking at the door.
"There's a lot of very wealthy people that are going to own gold as a defensive hedge for what they're fearing is that whole Weimar Republic thing, where either the Europeans or the United States aggressively prints money, where the multiplier effect kicks in on the banking side, and you get this out-of-control inflation," Scaramucci said, referring to hyperinflation that occurred under the German democratic system in place between 1919 and 1933.
But Scaramucci says these gold bugs just aren't doing their research. "If you read the minutes from the Federal Reserve, or if you look at the essays that Ben Bernanke just recently published, you will discover that your central bankers, particularly in the United States, understand this issue very well. And that's one of the main reasons that gold has not worked in this environment."
The Fed minutes make clear that the Fed is keeping a close eye on inflation, and is keeping risk factors in mind. For instance, the latest Fed meeting minutes, from the July 18-19 meeting, note: "Although the staff saw the outlook for inflation as uncertain, the risks were viewed as balance and not particularly high."
Round integers like 1,700 on the S&P 500 are well and good, but savvy traders have their minds on another number: 2.75 percent
That was the high for the 10-year yield this year, and traders say yields are bound to go back to that level. The one overhanging question is how stocks will react when they see that number.
"If we start to push up to new highs on the 10-year yield so that's the 2.75 level—I think you'd probably see a bit of anxiety creep back into the marketplace," Bank of America Merrill Lynch's head of global technical strategy, MacNeil Curry, told "Futures Now" on Tuesday.
And Curry sees yields getting back to that level in the short term, and then some. "In the next couple of weeks to two months or so I think we've got a push coming up to the 2.85, 2.95 zone," he said.
(Read more: US Treasurys widen losses after data hints at less stimulus)
Jim Iuorio, the managing director of TJM Institutional Services and a CNBC contributor, thinks the old highs for the 10-year yield are in the cards, but he says that's because of expectations about what Federal Reserve Chairman Ben Bernanke might be thinking.
"The chairman wants to control volatility by sending rates up to a higher level, but he wants to control the rate at which they go higher. The spike up to 2.75 that happened three weeks ago alarmed him," Iuorio said. "Now the market thinks he's ready to start opening the door a little further. So we're headed back to those old highs."
(Read more: Why I'm selling bonds ahead of the Fed)
Is the stock market in a bubble? If not, it's awfully close to one, Robert Shiller argues.
"We have been in an up market since 2009, and it's been quite dramatic," he said on Tuesday's "Futures Now." And as the market rose, "it brought more and more people to regret that they didn't get in in 2009," he added. "So yes, it does have aspects of a bubble."
But what is a bubble, exactly? In the second edition of his book "Irrational Exuberance," the economist defines "speculative bubble" as "a situation in which news of price increases spurs investor enthusiasm, which spreads by psychological contagion from person to person, in the process amplifying stories that might justify the price increase."
A professor of finance at Yale, Shiller believes that this could accurately describe the current state of things. With its precipitous rise, the market has "certainly generated stories that are optimistic," he said.
Bond yields are destined to go higher—the only real question is how quickly.
It's been 15 days since the 10-year yield printed its 2.75 percent high. At that point in time, it was clear that Chairman Ben Bernanke was alarmed by the volatility and dramatic price action caused by the mere mention of the taper. After an aggressive, Fed-wide backpedal, they've been able to contain volatility and engineer stability.
My belief is that the Fed doesn't want long-term rates to go much lower than current levels, for fear that it could put us right back where we were a couple months ago, and create the potential for market shocks. So on Wednesday, I believe we will get mild taper talk which will move the market in the direction of the July 5th high in yields.
(Read more: Wall Street pros: Fall taper priced in...sort of)
Even though we are seeing record supplies for crude oil, and China's growth is moderate at best, the crude market has held up fairly well over the last few weeks. So what gives?
First of all, we have unrest in Egypt once again. In addition, we are in the peak of driving season, which historically has been bullish for crude demand and oil products.
(Read more: Egypt's Brotherhood stands ground after killings)
Corn, wheat and soybean futures are all trading at 52-week lows, with corn dropping over 30 percent on the year. But that doesn't mean consumers should budget less for English muffins or movie popcorn.
"It translates less than you would think," said Scott Nations of NationsShares and a CNBC contributor. "The cost of wheat that goes into the price of bread is relatively minor, compared to the price of the loaf."
This year's commodity crush came after a 2012 drought put severe pressure on crops, reducing supplies and spiking prices. As weather has been more favorable this year, record crop yields have been expected, and this has pushed prices down. But some back-of-the-envelope math tells us why this won't be noticeable at the supermarket checkout.
"As a rule of thumb, gross margins for food companies are in the 25-to-30-percent range, so that gives you an idea of what the cost of goods sold is" Jefferies analyst Thilo Wrede told CNBC.com. "And if the cost of goods sold is 65 to 70 percent of revenue, then input costs are half of that. And of those inputs, the biggest is energy—natural gas for cooking and for packaging, and oil for distribution. So grains are maybe 5 to 10 percent of cost of goods sold, depending on the company."
For that reason, while "you do you see a connection between input costs and costs on the shelf," grain prices don't have a huge impact on packaged food prices or on the performance of food stocks like General Mills or Kellogg, Wrede said. In fact, "it's really energy prices that you have to watch," according to the analyst.
Will the S&P overtake 1700? With so many major stops above that level, a test is almost guaranteed.
Equities are trading well below highs Friday morning, on worries that the planned stimulus coming out of Japan may not meet expectations. Consumer Price data out of Japan beat expectations and showed the biggest jump since 2008, causing the yen to rally more than a point.
We all know that a stronger yen puts pressure on the equities market, as traders look for a risk-off trade. We are seeing a flight to bonds this morning as a safety trade heading into the weekend.
(Read more: At last, inflation in Japan is speeding up)
The S&P traded to a high of 1689 on Thursday night before selling off more than 10 points. The market found resistance at the 1686 to 1687 level, trading to a high of 1686.50. A close above here will be needed to provide bullish momentum into the close. Meanwhile, a fall back and close below 1681 will be discouraging to the bull camp.
Janet Yellen will be the next chair of the Federal Reserve, and the bond market will love it. At least, that's the case made by Tony Crescenzi, an executive vice president, market strategist and portfolio manager at Pimco.
Chairman Ben Bernanke is widely expected to step down when his term ends in January. Speculation was all but confirmed when President Barack Obama told Charlie Rose on June 17 that "Ben Bernanke's done an outstanding job" but "he's already stayed a lot longer than he wanted to or was supposed to."
So who will the next chair be?
"It can't be known," Crescenzi said on Thursday's "Futures Now," but "the odds are highly in favor of Janet Yellen to be the first woman Fed chair" on the strength of "all her experience at the Fed."
Since October 2010, Yellen has been vice chair of the Fed's Board of Governors. She had previously served as the president of the Federal Reserve Bank of San Francisco.
The case for Yellen may have gotten another boost from a letter going around in the Senate. Signed by a third of the Senate's 54 Democrats, it urges Obama to appoint her, The Wall Street Journal reported late Thursday.
Crescenzi believe that the bond market also would be a fan.
"The bond market would probably rather have Janet Yellen in place, with her vast experience at the Federal Reserve," he said. "She would probably keep in place the transparency effort of the Fed, and also its communications efforts. As well, it looks like she would likely continue Ben Bernanke's program."
Crescenzi added, "There are too many uncertainties regarding the other candidates," so choosing on of them could mean "extra yield that investors demand for bonds," and "it would mark equities down."
We are in the middle of earnings season, and by most accounts, results have been good. Of the 233 S&P 500 companies that have reported, 68 percent of them have beat their earnings estimates, which is above the historical average. So why isn't the market trading higher?
There are two key reasons, in my view. The first is that expectations have been scaled back so dramatically. This means that even though companies are beating expectations, this is not exciting investors, because the bar has been set low.
Second, investors clearly anticipate that the Federal Reserve will soon scale back asset purchases, and that has caused some folks to take profits off the table. Many investors think the Fed is the only thing holding this market up, and whether this is right or wrong, that it is the perception.
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