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market vibes
September 5…)
The fraternity of man
Ending the first week of September, there is very little buzz in the news. The Department of WAR joins The Gulf of America, Mount McKinley, Fort Bragg, and nine Army bases renamed by Biden and restored by Trump. Armani dies at 91. Djokovic vs. Alcaraz in the semis today. And a record high in the S&P 490 yesterday!
NFP due: 75,000 vs. 73,000, headline 4.2% vs. 4.3%, AHE MoM 0.3% vs. 0.3%, YoY 3.9% vs. 3.7%. The new narrative is that a new normal of 75,000 new jobs is the baseline to maintain a net zero jobs number as Trump cracks down on illegal workers. Some think net zero could be as low as 35,000.
According to the U.S. Department of Labor, real wages for blue-collar and hourly workers in private-sector industries like manufacturing, construction, and retail rose approximately 1.7% to 2% in the first five months of 2025. This is the fastest wage growth since Nixon’s first administration in 1969 and the only positive increase in the initial five months of any presidency during that period, except for Trump’s first term, which saw 1.3% growth.
Bloomberg today: “Japan will raise its minimum hourly wage by a record 6.3% to ¥1,121 ($7.56), reinforcing the nation’s wage-price cycle and supporting the case for the Bank of Japan to keep hiking rates.”
Goldman Sachs says gold can trade at $5,000 if Trump undermines the Fed…an interesting note since he already has.
In the markets
Gold prices had the first down rotation in eight sessions yesterday (the low of Thursday is lower than the low of Wednesday). I expanded the scale to highlight well-correlated OI with prices, indicating new longs are driving prices both getting in and getting out. OI is still very low in longer time frames. There is plenty of room before gold gets crowded on the Comex..
A down rotation after an eight-day up auction is simply a pause. If prices trade under yesterday’s lows, that would be the first indication a new range (time undetermined) may be developing. I think the general condition of this rally looks healthy. There are no technical developments in silver since the pit close yesterday.
S&P 500 is higher on typically necrotic development. Nothing much else to say other than it’s boring watching robots process AUM into a handful of mega-cap shares like NPCs (non-player characters) filing silently into storage in a video game.
Nothing is happening in oil. If you go home with a position tonight, you’re stuck with it until the Sunday Globex opening. I think it’s 50/50 they add a few barrels to force cheaters to max their bpd so they can adjust quotas to real levels next year. Oil is a very slow-moving, long game.
Now that we’re in the 60s, we’re either going to stay here for a year or two, or dip for a few quarters to force out the weak players. Sometime after the 2026 elections, oil will probably reprice back to the 80s at least and, depending on overall inflation, gold, etc., trade back to 100, where it was for four years from 2010 to 2014.
Unless, of course, there is a World War III, but it’s never a good idea to bet on the end of the world.
In other markets and my vibe
Stocks want a chilly number, but they might like a hot number. If they do, gold will like it, too, in my opinion. Bitcoin can do anything, but it’s probably going to trade with stocks. Bonds look positive, so major capital markets are indicating a soft NFP this morning. The copper market, silver, and PGMs should come along.
The dollar is cheap considering the forecast for U.S. economic growth. I don’t see a rally threatening commodity prices because DXY’s POC for the last 30 years is 100, meaning all trade-weighted currencies are losing purchasing power together at about the same rate. DXY could fall to 95 on a sequence of rate cuts, but Japan is going to race the dollar down, and Europe is a mess… almost as bad as China. In a nushell, trading FX is like mowing lawns that never grow.
note to self: the worst seats are the best seats
Happy Friday
JJ
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"In a nutshell, trading FX is like mowing lawns that never grow." JJ, my friend, I know what you mean, and I love that line, but as a veteran FX trader I'm hoping it's a signal like "it's darkest just before the dawn!" cheers, Victor
"Bitcoin can do anything, but it’s probably going to trade with stocks" - the most concise, most accurate btc analysis I've ever seen. I've been in the space since 2014. In crypto, I can explain the various technologies (and nonsense), the people, the reality, and the memes. I've heard it all, watched btc valuation theories rise and fall. Got a little burned listening to people talk the other end of their book, and made a little money riding a sensible notion. But in 12 words, you've very accurately summed up the current state of affairs. It is refreshing to hear.