"The Gloom Boom and Doom Report" Publisher Marc Faber won't back down from his bearish call on U.S. stocks. » Read More
By: Annie Pei
There's one thing that will drive the market's next rally, says strategist Joe Zidle. » Read More
By: Annie Pei
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
They say that good things come to those who wait — and that couldn't be truer for the bulls on Wall Street, according to one technical analyst.
Bank of America Merrill Lynch's Stephen Suttmeier said Tuesday the market recently experienced a "very rare signal" that could lead the S&P 500 as high as 2,400.
There were 414 calendar days between the May 2015 high and the recent one, Suttmeier said on CNBC's "Futures Now." The S&P 500 has been churning sideways for much of the last 24 months , without a meaningful breakout. But it's that lack momentum that has Suttmeier convinced we could be on the brink of the next leg higher.
He explained that since 1929 there have been 24 instances where the market went 300 calendar days or more without making a new 52-week high, and in those times the forward return was much stronger than average.
"The bottom line is when I look at these numbers and if we do follow this signal, 250 days out the average return is about 15.6 percent, the median return is about 14.8 percent and the market is up 91 percent of the time," he said.
Furthermore, Suttmeier cited improving market breadth, which measures the number of companies in the market advancing versus declining, and the number of companies hitting new 52-week highs as confirmation that this recent move past new highs could foreshadow the next great bull run.
"If you look at the price pattern here, it does support the case to get up to about 2,300 or even 2,400, and that dovetails with those targets from that signal," Suttmeier said. That's a respective 7 and 11 percent from where the S&P 500 is currently trading.
A massive global stockpile of oil could mean trouble ahead for the global crude market, according to Barclays.
Crude oil prices dropped to a two month low on Thursday, after the Energy Information Administration reported a smaller-than-expected decrease in oil stockpiles. That may be a canary in the coalmine, a top energy market watcher explained.
"For the last 6 quarters there's been this discrepancy between global supply and global demand," Michael Cohen, head of energy commodities research at Barclays, said last week on CNBC's "Futures Now."
Cohen said Barclays is bearish on oil for the next six to eight months, because the current stockpile could increase in an economic downturn, likely to drive prices lower. In the summer months, increased travel often increases the demand for gasoline, and drags up crude oil by default. Yet once that season ends, inventory levels may continue to rise.
Looking at a chart of the expected crude oil supply compared with the current amount, Cohen said the disconnect is staggering. The chart accounts for oil supply from the 38 countries in the Organization for Economic Cooperation and Development (OECD), which includes the U.S., U.K., France, Germany and Canada, among others.
Gold just posted its longest weekly winning streak since July 2011, but if investors missed out on the recent rally, fear not. One trader says the commodity has "unlimited upside," and investors have the Federal Reserve to thank for it.
On CNBC's "Futures Now" this week, Tom Colvin said that gold will remain in a bull market that will only come to an end "when central banks take their hands out of the cookie jar." The Federal Reserve is unlikely to hike rates in the foreseeable future, despite a blockbuster June employment report on Friday.
"The year-to-date rally in gold has been nothing short of spectacular, benefiting from what we have seen as a 'confused Fed' or a Fed lacking action," the senior vice president of global institutional sales at Ambrosino Brothers explained.
Gold prices have rallied 28 percent in 2016, hitting a two year high earlier this week. Even as the yellow metal has pulled back from those highs in the last two sessions, Colvin expects these dips to arise as buying opportunities for investors.
Gold started the year in a rally "and it hasn't looked back," Colvin said. "While the first six weeks of 2016 were slow to develop, the Fed's inability to secure more rate hikes, or even convince the market they were coming , fueled the rally we are seeing," he added.
This week, Bank of America-Merrill Lynch forecast that gold was building up a full head of steam that could take it to $1,500 per ounce. Colvin also has bullish expectations for bullion. His near-term target for the precious metal is $1,400, roughly $50 above where it's currently trading. Gold has not been above that level in three years.
"The market can take good news and bad news," Colvin told CNBC. However, "a confused Fed, saying one thing but doing another over and over invites buyers of gold to jump into the pool with both feet and they have."
Furthermore, Colvin says a "top heavy" equity market—the S&P 500 is within a hair of its all-time high—should continue to invite investors to buy gold as a hedge.
Stocks may have erased their post-Brexit losses, but one market watcher says there's more for investors to be worried about.
"The world just has too much debt, it's got aging demographics and it's got a lot of technology that aims to replace workers," warned Ed Yardeni on CNBC's "Futures Now" on Thursday. "Put it all together and you don't have much inflation and you don't have much growth."
From here, Yardeni envisions a global market where individuals may struggle to find safe havens for their money.
"Plenty of people are working and are hard-pressed to find a place to invest," said Yardeni. "They're all getting stretch marks from stretching for yield."
Indeed, the hunt for global yield remains fairly dire. Japan's entire yield curve is negative with the exception of the 30-year, which stands at about 0.045 percent. In Germany, the 10-year bund hit a new record low of -0.204 percent on Wednesday.
Amid the negativity, Yardeni is concerned that the Fed will continually be impacted by the weakness of global markets.
"In the past, the Fed rarely paid much attention to what was going on around the world," explained Yardeni. "They can't do that anymore."
Yardeni said that, prior to Brexit, Yellen's approach has been dovishly flawed and he expressed frustration over the notion that she can now reference the U.K. referendum when delaying a change in Fed policy. Currently, Fed futures indicate that the odds of a December rate hike are just above 16 percent.
One of the most crowded trades on Wall Street is about to implode, says one market watcher.
"We're in an epic bubble of colossal proportions," Peter Boockvar, managing director and chief market analyst at The Lindsey Group, said Tuesday on CNBC's "Futures Now" in reference to the fixed income market.
Global yields have been tumbling to record lows, with many dipping into negative territory. The U.S. 10-year hit its lowest level ever this week as traders continue to seek safety in the bond market. Yields move inversely to prices.
However, Boockvar believes that this activity is a ticking time bomb for the global economy. He reasoned that U.S. Treasury yields are being dragged down by negative-yielding debt out of Germany, Japan and Switzerland and misplaced monetary policy, and is therefore skeptical as to how much longer the rally can continue.
"It could be central banks that end this," said Boockvar in regard to upward momentum for bonds. In his recent coverage, he reacted to the newly released FOMC minutes and further questioned the Fed's ability to act effectively.
"They'll call it being 'patient.' Their forecasts are now irrelevant, their communication is now meaningless and their tools to handle whatever might come our way are toothless," noted Boockvar when describing the Fed's ability to address a flattening yield curve.
In Europe, concern for Italy's economy continues to rise as that nation struggles to maintain negative interest rates while simultaneously raising capital for its banking system, which is straddled with mounting debt.
"Maybe Italian banks are telling us that central bankers and their negative interest rate policies are actually destroying the Japanese and European banking system?" asked Boockvar in the CNBC interview.
He reasoned that Bank of Japan Governor Haruhiko Kuroda and European Central Bank President Mario Draghi could take a look at what's happening in Italy and decide that their respective monetary policies are the wrong course of action. Ultimately, Boockvar warned of the fallout that could occur if multiple nations opt to end what he referred to as a "negative deposit rate regime."
"Even if they put it back to zero, imagine the carnage, at least in the short-term bond markets," concluded Boockvar.
One of Wall Street's biggest bulls says stocks could skyrocket as much as 20 percent over the coming months due to an unusual event, one that has only been seen twice in the last 65 years until now.
Here's what happened: On June 28 and June 29, 90 percent of the New York Stock Exchange (NYSE) volume was positive. Canaccord Genuity chief investment strategist Tony Dwyer said the combination of historical precedent and fundamental backdrop suggests a 15 to 20 percent upside over the next 6-12 months.
It may sound technical, but according to Dwyer, the conviction on the part of market participants can often indicate future rallies. Certainly, the market appears headed in that direction already: Last week, stocks all but fully recovered from their Brexit knee-jerk selling, with the broad S&P 500 Index logging its biggest weekly gain since October 2014.
"If you go back to look at 1950 on just occurrences, when you had two upside 90 percent days you have never been negative three, six and twelve months later. As a matter of fact, your median gains are 12 percent, 18 and a half percent, and 29.2 percent," Dwyer recently told CNBC's "Futures Now."
He crunched the numbers with help from data gathered by SentimentTrader.com's Jason Goepfertat.
Ralph Acampora, sometimes referred to as the godfather of technical analysis, believes markets are poised for a big run now that the smoke has cleared on the U.K.'s referendum on European Union membership.
"There was technical damage [last] Friday and Monday" following the U.K.'s vote to leave the E.U., and "I thought we could go a little bit lower," the director of tactical investments for Altaira Limited told CNBC's "Futures Now" this week.
"I was right for about 30 seconds," he joked. Since the global selloff following the Brexit, about 70 to 80 percent of U.S. index losses have been recovered.
"We've had an unbelievable reversal," observed Acampora. "I've been looking at charts for 50 years and this is quite a head fake."
The technician added that the upward movement has been very broad-based, and noted that the low level of bond yields make equities much more attractive. On Thursday, the U.S. 10-year Treasury dipped to 1.45 percent from 1.5 percent, while the German bund yield settled at a new record low of -0.13 percent—a negative yield.
The historic U.K. vote to leave the European Union is a sign of a major global meltdown, not just a watershed that marks the end of a unified continent, former Rep. Ron Paul says.
"I think [the EU] will become nonfunctional," Paul told CNBC's "Futures Now" on Tuesday.
"It really is coming to an end. It doesn't mean tomorrow or the next day, but people are going to be really unhappy. The end is coming, but it isn't coming because of the breakup," he added.
Paul attributed the fallout to "bad fiscal policies" around the globe. He said that as long as interest rates remain low, the markets will remain in bubble territory.
"I think what everyone is looking at is there was a vote, an important vote and it went differently than expected and it sent shock waves through the markets, but I think the concentration is on the wrong issue," the former Libertarian and Republican Party presidential candidate said.
Instead, he said, what has caused so much turmoil is what happened before the recent declines.
"What has been preceding this situation that we have throughout the world and this country as well is artificially low interest rates. It causes people to make mistakes in buying bonds," he said.
All major U.S. indexes fell back into negative territory for 2016 on Friday and Monday after the Brexit vote, getting a twinge of relief on Tuesday. Still, Paul expects a heap of market weakness to come.
"Catastrophe doesn't come unless there's something that precedes it, and what sets the stage is monetary policy, artificially low interest rates, zero interest rates," he said. "There's a lot of instability still out there, and this hasn't been corrected yet. I don't think it's going to correct easily," he said.
"We are running out of steam."
Oil has hovered around the $50 range since mid-May, and with summer travel almost in full swing one analyst thinks that rising demand will keep crude fairly stable for the next few months.
Come fall, however, a different story may start to emerge.
Tom Kloza, Global Head of Energy Analysis at the Oil Price Information Service, believes that high demand for gasoline means that crude will sit at a $50 "comfort point" for the next two months or so. Still, Kloza thinks there could be a fairly sizable drop after September rolls around
"We saw the highest demand ever, we used something on the order of 59 million gallons a day of gasoline," he said last week on CNBC's "Futures Now." "That will prove as something that will help crude out for the next 8 or 10 weeks."
The problem will surface after that period he said, when buoyant oil will "go into purgatory in the fall," he added.
"You have lower refinery runs, you have a lot of gasoline because there are a lot of cheap hydrocarbons, and you have a drop of maybe 4 to 5 percent in demand even if the macroeconomic background is very steady," he added.
A whole host of international events could also derail oil's current stability. Kloza describedthe reaction to the Brexit results as "orderly and predictable" in an email Friday to CNBC. Yet he sees other global troubles as being more directly threatening to oil than the U.K.'s exit out of the European Union.
"In the fall, there's no question there's going to be a challenge in the marketplace, particularly if you see production in some of the places like Nigeria and Kurdistan will ramp higher," said Kloza.
"I think we [also] have to worry about Gulf Coast hurricanes, which could knock out Gulf of Mexico production crude-side and really wreak havoc on the refined products side," the analyst added.
Investors with their eye on oil shouldn't discount the timeline leading up to the U.S. election this November, especially when trying to gauge demand in the fall.
"The question is really whether or not it's a driving season thing and what happens after Labor Day," Kloza explained. "You've got an election where people aren't very happy with the choices, and they may show that it may not be to vote with [their] feet, but to vote with [their] cars in traffic."
Oil dropped by more than 4 percent during Friday trading following the U.K.'s referendum results. Risk assets opened sharply lower in early trading on Sunday as investors continued to grapple with the fallout.
Global stocks plunged and the S&P posted its worst open in 30 years after British voters approved a U.K. exit from the EU. Just how low will markets go, and for how long?
According to NorthmanTrader.com founder Sven Henrich, 1,950 could be the number to watch on the S&P 500. Looking at a chart of the S&P 500's key levels, Henrich had predicted that the index could have climbed to as high as 2,150 had the U.K. had chosen to remain in the European Union. But now with the Brexit referendum settled in favor of the leave camp, those levels are unlikely, especially given that the S&P 500 looks to be staying in its months-long trading range.
"We've been in a range, nothing has changed in that regard," Henrich said Thursday on CNBC's "Futures Now." "But every time the S&P 500 gets above 2,100, volume kind of dies and the marginal buyers are disappearing. So we need some sort of trigger to get buying in."
Henrich emphasized that regardless of the Brexit vote, global markets are still unpredictable.
"What happens then? That's the big question because I see a lot of divergences outside of the S&P 500, because a lot of industries are not following the S&P 500 here," he said. "If you look at the Dow, or the ICE, the financials or the DAX, they're all far below their 52-week highs."
But what has Henrich even more on his toes is the Federal Reserve. The trader points out that Janet Yellen's testimony brought up some issues that are actually "more important than Brexit."
"They admitted that the forward price-to-earnings ratio of equities is actually increasing to a level well above their median price for the past three decades," said Henrich. "At the same time, they're talking about productivity lagging. In fact, productivity the last five years, the growth grade has been lower than any time period since World War II. They're talking about fixed business investment declining and industrial production falling."
"At the same time, they're saying that equity prices are vulnerable to rises in term premiums at more normal levels, meaning that if we suddenly see some sort of move, equity prices could correct," he added.
U.S. markets plunged Friday morning following the vote, with the S&P 500 seeing its worst open since 1986. The Nasdaq and the Dow were also down more than 2 and 3 percent respectively following the opening bell.
CME Group brings buyers and sellers together through its CME Globex electronic trading platform and trading facilities in New York and Chicago.
Take your trading to the next level with a platform that lets you trade stocks, options, futures and forex all in one place with no platform or data with no trade minimums. Open an account with TD Ameritrade and get up to $600 cash.