Again Capital's John Kilduff weighs in on whether the crude rally can continue. » Read More
JPMorgan Private Bank's Anastasia Amoroso sees volatility picking up ahead of next week's Federal Reserve meeting. » Read More
The S&P 500 is on a streak that could signal a pullback ahead, according to one strategist. » Read More
After months of churning in a narrow range, the markets could be in store for a very sharp move, according to veteran technician Ralph Acampora.
"I think if you look at the S&P 500 and put a Bollinger Band on it, it's getting very tight," Acampora told CNBC's "Futures Now" on Tuesday. Technicians often look at Bollinger Bands as a measure of volatility in the market — they tend to tighten during periods of low volatility and widen during periods of heightened volatility. The S&P 500 has not seen a 1 percent move in either direction since July 8 — its longest such streak since 2014.
"It's like winding a spring," he added. "This tells me that the move should be pretty dramatic either up or down, and I opt for the up because of the current leadership in technology and financials."
But what makes Acampora even more bullish lies beneath the surface.
"What's really impressive — and I've been looking at charts for 50 years and I've never seen [anything like this] — when the S&P 500 and Dow moved to new all-time highs, it was led by market breadth," said the director of technical analysis for Altaira Capital Partners. "That means the majority of stocks were stronger than the large blue chip averages. I don't think I've ever seen anything like that."
Acampora explained that the outperformance of small and mid-cap stocks lead him to believe that the market is broadening, and that could mean even more new highs in the near future.
"I'm fairly bullish longer term," he added.
The oil bulls are out again as one RBC oil expert sees oil heading about 50 percent higher over the next year.
Last week, Crude oil fell nearly 7 percent, hitting a three week low of $43 on Thursday before rebounding a bit on Friday following the weaker than expected jobs report.
While she believes oil prices will be volatile in the short term, RBC Capital Markets' global head of commodity strategy, Helima Croft, predicts that the commodity will rise as high as $60 in the year ahead.
"We may see as we head into the end of the year, as we get into December, [oil could move] into the $50s," said Croft last week on CNBC's "Futures Now."
In 2017, "we believe that's where we really start to work off the inventories and that's where we see us in the $60s."
But that very much depends on what could happen with the world's "stressed producers," as Croft calls them.
These are countries who are big oil producers, but find their production lines strapped, usually thanks to circumstances within their own borders. Croft raised Venezuela as a prime example, as the South American oil producer has struggled to maintain production amid roiling civil and political unrest.
The Andean nation's production has been impacted in the past by political and economic turmoil, and "if we have something like that happen again, that's a catalyst for moving higher," Croft said.
This is because such an event would strap Venezuela's oil production capabilities because of the unrest, preventing the country from pouring more barrels on to an already oversupplied oil market, thereby keeping supply capped in the face of what has been generally lower demand for oil.
Last month, the International Energy Agency said that global crude supplies were outstripping demand. However, Croft maintains that the oil oversupply looks to be easing, and that the persistence of the global glut has potentially been overblown. In a recent note, she wrote that "acute downside risks to the oil market are visible and are likely already mostly priced in."
For now, all eyes are now on the informal OPEC meeting slated for September, with the big question being whether a production freeze will be agreed upon.
"I think the market will move say $5 higher on the back of that because right now, nobody thinks OPEC has a heartbeat," she explained. "So if they announce a statement, I do think we will move higher."
Crude is now down more than 4 percent this year, after running above $50 in the first half of 2016.
As many investors view the August jobs report as a make-or-break moment for markets, one of Wall Street's largest banks says several other key pieces of data could ultimately help the Fed shift toward a September rate hike.
"Growth is set to rebound in the second half of the year after a very, very weak first half of the year," said Gabriela Santos of JPMorgan on CNBC's "Futures Now" on Thursday. "That's what matters for the Fed."
The global market strategist noted that, despite weak manufacturing data, her firm remains optimistic because of diminishing global risks and nascent inflationary pressures in addition to expectations for an improving U.S. labor market.
Therefore a strong employment report, compounded with these other key pieces of data, could ultimately lead to a near-term rate hike.
"We've seen a substantial improvement in the labor market since that very disappointing May number," added Santos. "What we're looking for is not just a strong headline number, but an all-around strong report with strength in payrolls, a drop in the unemployment rate and some further pickup in salary growth."
After a May where only 24,000 nonfarm payroll jobs were added to the economy, June and July saw 292,000 and 255,000 jobs added, respectively. However, Santos doesn't believe September's result has to be within the same range for the Fed to consider a move and added that 150,000 jobs could be enough to move the needle in 2016.
"We're coming on the back of months of a very strong rebound in the payrolls number," Santos said in reference to her expectations for ongoing positive developments, which include a rate hike. "If it doesn't happen in September, it's happening in December."
Investors are not fully prepared for a September rate hike, and they're too complacent about the chances for another one in December, according to money manager Jeroen Blokland.
"The U.S. economy has continued to grow showing decent numbers," said Blokland, senior portfolio manager at Robeco, on Tuesday's "Futures Now. "I think the Fed just has to get off the 0.5 percent at some point and this is probably a good time to do so."
Blokland, who has just under $300 billion in assets under management, believes the Fed has already missed a couple of vital opportunities for a rate hike.
"The Fed should raise rates sooner than later," he contended. "Jobs have grown at an above-average pace since December. Wages, income, spending are all growing at a decent pace. Consumer prices have risen as well."
If Friday's August employment report is strong, it'll give the central bank more ammunition to boost rates a quarter point to 0.75 percent.
"We have to take into account that these interest rates are still extremely low and that the Fed is looking for a gradual path to normalization," he said.
On Friday, Fed Chair Janet Yellen said the case for an interest rate rise "has been strengthened" by recent data, though she did not lay out a timetable for future hikes.
And as for stocks?
"The markets look a bit frothy. So, I think this could be an important hurdle for stocks to rise further from here," Blokland said.
Call it the curious case of gold and bonds.
Typically, the yellow metal and U.S. Treasurys move in opposition as investors shift from one to the other in search of a safe haven amid changing economic conditions.
However, Dennis Gartman, editor and publisher of The Gartman Letter, highlighted some very unusual activity that's been underway in recent months.
"Having been at this for 40 years, I always look for anomalies," explained Gartman on CNBC's "Futures Now" on Thursday. "It's very strange to me that, since June, as went gold so went the bond market."
"It doesn't make any sense to me," said Gartman. "If you go back over the course of the past many years, they move in contravention."
It hasn't been a great few months for oil, but one technical analyst believes crude could be headed for $70 per barrel in the near future.
Despite bearish outlooks like from Goldman Sachs, which predicted this week that oil will be trapped in the $45 to $50 range, Orips Research chief market technician Zev Spiro sees oil surging again. This time, it could rally about 50 percent above current levels.
According to Spiro, oil's impending rally has been building from a technical perspective since last year. Looking at a weekly chart of crude, Spiro points out that a "head and shoulders bottoming pattern" began in July of last year. An inverse head and shoulders pattern like the one on Spiro's weekly chart is seen as an indication that an uptrend could be on its way.
There's one more thing Spiro needs to see before he's sure.
"This large complex bottoming pattern could trigger a confirmed move above the horizontal neckline in the $50-$51 area," he said Thursday on CNBC's "Futures Now." "[This] would signal a primary uptrend with a minimum expected price objective in the $73 to $76 area."
But the surge may only come after more losses for oil in the short term. A daily chart of oil shows Spiro that a so-called "bearish evening star pattern" formed in August, which could spell more movement to the downside in the next few weeks.
"The pattern indicated minor resistance at the height of $48.75 and a possible pullback in the near term," said Spiro.
Nevertheless, Spiro maintains a bullish outlook for oil based on long-term patterns that he sees developing.
"Despite the potential for lower prices in the near term, the overall picture is bullish as prices are forming the right side of this large bottoming pattern," he explained.
Based on what he sees in the charts, Spiro argues that investors have two potential buying opportunities in oil. The first would be when oil pulls back to its current support around $43.50, and the second when oil breaks above Spiro's neckline area of $50 to 51.
On Friday morning, oil traded around $47.
If you're waiting for Fed Chair Janet Yellen to give some guidance as to when she will hike interest rates, don't hold your breath — says one Wall Street firm.
"The market is hoping that she's going to give us clarification, not only on long-term monetary policies, but also some clarity on current monetary policy," explained JPMorgan's Priscilla Hancock on CNBC's "Futures Now" on Tuesday. "[However], it's likely that the market is going to be disappointed. [It] would be wise not to expect too much from Janet going into Friday."
Ahead of the upcoming Jackson Hole conference where Fed Chair Janet Yellen is scheduled to speak, investors are indeed pining for some concrete insight as to what the Fed's next move will be. However, Hancock firmly believes that Yellen's approach will remain extremely cautious and that it will continue to focus on a variety of factors including risk management and global monetary conditions.
This notion does come amid some recent hawkish rhetoric from San Francisco Fed President John Williams and New York Fed President William Dudley, but Hancock doesn't not envision a rate hike in the fall.
"We're still calling for a December rate hike," explained Hancock. "It seems to me that the GDP numbers and inflation are moving us down the path to where the Fed is going to look to a December hike. That is our base case."
In the second quarter of 2016, U.S. GDP increased at a yearly rate of 1.2 percent as inflation has steadily declined through the summer months.
Going forward, JPMorgan anticipates an extremely tight trading range for yields to continue, regardless of positive economic data, as the market remains cautious alongside Yellen.
"It's hard for the curve to flatten significantly from here," said Hancock. "Likewise, it's hard for the curve to steepen." Hancock reasons that this is because central banks are buying a significant amount of bonds every month, which limits the amount of movement global investors from Europe and Japan can cause through the trading of U.S. Treasurys.
In the last month, the U.S. 10-year has lost just 1 percent while the two- and five-year notes remain unchanged.
"Everybody is searching for yield," concluded Hancock. "Now we have a situation where the technicals are 'uber' strong and the demand is extraordinary. Any tiny tick up in rates is just met by demand. That's keeping yields down and it's keeping spreads tight."
As equities continue to defy history and edge higher in August, a top Wall Street bank is keeping an eye on one key bearish indicator.
"We've had a couple of weekly candle patterns, which suggest that there's some indecision about the market," said Chief Equity Technical Strategist for Bank of America Merrill Lynch Stephen Suttmeier on CNBC's "Futures Now" on Thursday.
Suttmeier emphasized that while his team remains bullish on the S&P 500, traders should consider the candles in order to draw conclusions about the market's next move during the second half of August. Candlesticks show movement over a given period of time and the shape demonstrates highs and lows as well as opening and closing prices.
Suttmeier illustrated that in recent weeks, the technicals for the S&P 500 appear to be bearish and that the recent occurrence of two types of candles have been troubling. During the last week of July and during the second week of August, a "doji" occurred, which is when the open and close remain at comparable levels and ultimately represent a sign of indecision on Wall Street.
The other recent bearish candle was a "hanging man," which occurred during the first week of August. This type of candle is considered to be a risky pattern and shows an increase for the likelihood of an interim top. In conjunction, these candles could represent some near-term downside, but Suttmeier remains optimistic that a drop could set-up a base for gains in the long-term.
"We do think that the S&P could settle and find support somewhere around 2,147," noted Suttmeier. "However, the breakout should remain intact and we do see much further upside."
Year to date, the S&P 500 is up 7 percent and has gained 19 percent since the February lows. The index was relatively flat this past week and ended down less than 1 percent.
Ultimately, Suttmeier explained that, despite recent bearish signs in the market, the reasons for optimism remain strong.
"I think we've got a lot of things going for us: breadth, volume internals and the credit markets are firm," said Suttmeier while discussing why the S&P 500 has remained in a cyclical bull market since March 2009, the second longest stretch in history.
Investors may be thrilled about the current bull market, but one market watcher believes that paying attention to volume is a better way to maximize their profit.
Paul Hickey, co-founder of Bespoke Investment Group, took a look at the performance of the S&P 500 Index over the years as it compared to volume. What he found was a huge difference in returns on days with below-average market volume, and on days when it was above-average.
"The cumulative return of the S&P 500 during this bull market on below average volume days [increased] 823 percent," said Hickey Thursday on CNBC's "Futures Now." "Cumulative return of the S&P 500 on above average volume days [saw] a decline of 65 percent."
One well-known market bull believes that stocks are set to keep climbing, but is looking for a key catalyst to drive further market growth.
Jeremy Siegel, professor at the University of Pennsylvania's Wharton School, appeared on CNBC's "Trading Nation" in July to predict that equities could jump by as much as 15 percent in the second half of the year. In an appearance Tuesday on CNBC's "Futures Now" he reinforced his outlook, though this time with the caveat that a strong earnings season is needed or the market could see its wings clipped.
"I think we need an earnings acceleration If we really want to get this market moving," said Siegel. "But in the presence of a 1.5 percent 10-year [Treasury note yield], low rates, the Fed [giving] at most one increase [this year] and the dividend yield on the stock market being over 2 percent, people are saying, 'Hey, it's not bad being here.'"
While investors have been thrilled with the continual highs set by today's markets, there has also been a touch of caution even in spite of the good news. Three consecutive quarters of lower productivity growth, weak GDP expansion around the world and record low inflation have caused even a market bull like Siegel to temper their predictions for a market rally.
But with a steady earnings season, things could change. Big tech stocks like Apple and Facebook have led the charge in second-quarter earnings, while financials have recovered somewhat with many of the big banks beating estimates. Biotech companies have also performed relatively well, with giants like Amgen and Biogen crushing estimates, sending their stocks soaring in the aftermath.
The successes have been offset, however, by other sectors that have seen disappointing results. While a handful of retail's big names, like Michael Kors and Ralph Lauren, have managed to beat earnings estimates, investors are still urged to approach them with caution given the industry's struggles this year. Energy earnings have also disappointed this quarter, with big names like Exxon Mobil missing estimates by large margins.
Siegel still sees the S&P 500 headed above 2,300 this year, which means that the index would have to rise about another 6 percent based on Wednesday's level of 2,177.34. But Siegel is also looking at possible rallies in the Nasdaq and the Dow to take the markets higher.
More specifically, Siegel believes that if a catalyst like earnings appears to drive growth, the Dow could beat its intraday record of 18,622.01, which the index set in late July.
"We'll get over 19,000, that isn't much from now [and] it could reach near 20,000 if we get a meaningful acceleration in GDP and earnings growth, [along with] getting oil back towards $50 to $55," said Siegel. "That would revive the energy sector, which has been a big drain on earnings."
But at the same time, the current economic environment could also mean that all three indexes fall short of reaching their full potential, especially if the rest of this season's earnings reports don't pick up.
"I don't think there's going to be that much deviation between the S&P, the Dow and the Nasdaq, [with] the Nasdaq [being] more tech heavy, [and] the tech sector has been doing well," he added. "That's really where the only real growth tends to be, but I think all of them are going to be up less than 10 percent this year unless we get a meaningful acceleration in the second half of the year."
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