Futures Salesman Muoio Leaving Citigroup to Manage Own Money

Paul Muoio, author of a daily note to customers on macro futures strategy since 1998, is leaving his job as regional head of futures for North America at Citigroup Inc. in New York at the end of the month to manage his own money, he said.

Muoio, 50, has become well known to more than 400 people who receive the note, both for his market views and recommended trades, and for his discussions of the economic and market lessons drawn from his experiences as a New York commuter and as a father of two teenagers active in hockey and music.

Muoio started writing the note, which carries the subject line AM MESSAGE, when he and then-partner Tom McGill were promoted to run futures sales in 1998, and continued after his most recent promotion in 2011.

“The feedback from customers and colleagues was overwhelmingly positive, and it also helped me focus on the macro issues in the marketplace,” he said. The note “was what got me noticed here, what got me promoted. People know me because of it,” he said.

Muoio plans initially to work from home in Breezy Point, New York, investing in futures and options, with the goal of building a track record that eventually will enable him to manage money for others. He says he is “a discretionary trader, taking signals from a variety of technical indicators.”

A Brooklyn native who says he learned about risk and reward at Aqueduct Racetrack in Queens, Muoio graduated from Edward R. Murrow High School and, in 1985, from St. John’s University. He started working that year at Shearson Lehman Brothers, eventually becoming part of a futures sales desk that moved to Smith Barney in 1989. Smith Barney was swallowed by Citigroup via a series of acquisitions during the 1990s.

‘Something Different’

“I’ve been here a long time, I had a blast here, and just came to a point where it was time to think about something different to do,” he said. “I will miss a very fun and talented group of people.”

Regular readers are familiar with Muoio’s fondness for the directional movement index and for doing technical analysis on economic indicators, but also for his Triple Crown picks and “ice skating indicator.”

Most recently on Feb. 24, he wrote that public skating sessions are “the ultimate discretionary spend” because of their low price and consistent quality. “It’s $8/person of family fun time,” he wrote. His local rink was mobbed in 2013 as U.S. stocks surged, and it has been recently, suggesting that “the economy will roar back in the next few quarters.”

‘Made Money’

Colin Lundgren, the Minneapolis-based head of fixed income at Columbia Management, said he’s read Muoio’s note almost every day for 15 years.

“There are a lot of smart analysts and traders out there, but many aren’t necessarily good investors,” Lundgren said. “Most of his ideas made money, and he was the first to acknowledge the ones that didn’t.”

Muoio said his best market calls included one on May 4, 2010, two days before the 20-minute flash crash that erased as much as 9.2 percent from the Dow Jones Industrial Average and 8.6 percent from the S&P 500. On that day he observed “a diamond top” in S&P 500 futures, “the most rare and powerful technical pattern in existence.”

“It looks like could measure a 40-point decline,” he wrote. The S&P 500 fell as much as 100.1 points on May 6 and closed down 37.8 points.

In September and October 2012, with U.S. Treasury yields near record lows reached in July, Muoio wrote a series of notes headlined “Yield Is Dead,” in which he predicted the 10-year yield, then around 1.70 percent, was likely to top 2 percent and reach 2.21 percent, which happened during the first half of 2013.

Muoio said his worst calls “are numerous” and include having expected “a more V-shaped recovery from the 2008-2009 lows” in U.S. stocks, “and that we would be back to normal a lot sooner.”

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