dog days

market vibes

July 24…)

“Oh, when the sun beats down and burns the tar up on the roof
And your shoes get so hot you wish your tired feet were fire proof
Under the boardwalk, down by the sea, yeah
On a blanket with my baby is where I'll be…”

Data this morning includes Initial Jobless Claims due 288 vs 221 last at 8:30 AM EDT, New home sales at 10:00 AM EDT, expected a bit higher than May’s 630k at 650k.

In the news

Not much.

Powell’s fixer-upper, Epstein’s list, Ukraine’s very bloody affair, Gaza, China, rate cuts here and abroad, and even tariffs get scanned and skipped. The House has gone fishing.

Obama-gate is a daily reality, and capital markets couldn’t care less. The S&P 500 has made a new all-time high in 7 of 16 trading sessions in July, or one every other day—yawn. The NDX has made 6; the Dow, actually none.

The doldrums are a season unto themselves, or better said, a part of the summer cycles, preceding the dog days happily, when the VIX and sunscreen are besties..

In the markets

Gold is down again as the larger range puts the POC (point of control) at $3,345.00 back in focus. Open interest did not fall anywhere near yesterday’s volume, and action implied. New sellers and new buyers balanced yesterday’s sell voids on the Comex and equity openings. All eyes are on 8:20 AM EDT this morning.

Silver is down, but not much, considering the weakness in gold. No change in silver OI, and volume was typically very light yesterday.

Platinum is down with a similar absence of technical development to silver. Zero behavior in futures positioning and a void of urgency in volume. Palladium is mirroring platinum and silver.

My guess is the institutional side of these metals is short risk premia and unhappy about these rallies. They are big enough to tolerate P&L swings, and they’re either going to term the trades out or win. They won’t cover. The flat-to-lower OI represents the losers who have quit and cut their risks. If prices go higher from here, the weak side must face reality, but so far, these moves are not that dire.

If, or when, copper takes off to $15,000, as its narrative and forward demand numbers imply, I wouldn’t want to be short anything on the COMEX, NYMEX, or LME.

S&Ps had a typically silent overnight session, and the pre-opening position of the three major stock indexes is roughly the same this morning as it has been since Q2 gave way to Q3. The script is usually a dip for an hour, and then a bid emerges, gradually rising tick by tick, unchanged in the late morning and higher into the close.

This is the daily mating ritual of computers and algos, better known among humans as an orgy. Fortunately, computers don’t smoke afterward unless it’s a big down day (that’s a pun). Seriously, there’s a lot of money being made in a handful of names. Can Goldman go to $1,000? Yes, it can. Will it? Probably yes… in time.

In the oil markets, Dec Red Dec is a perfect example of present and future expectations for supply and demand: utterly and completely flat.

Heat cracks have turned down, and the fever has broken in distillates. The best thing for high prices is high prices, never more true than in refinery margins.

Although it takes a microscope and a search party to find the latest movement in DXY, I’ll stretch the scale of my chart to make that point.

DXY is not the arrow that slew gold yesterday, but it might add weight if it rallies. For now, FX and oil share a common desire for decelerating low-vol to no-vol. Six days to the FOMC…not a great time to be long premium.

Bitcoin is charging its passengers another $1,000 to ride the pony for another 30 days.

my vibe

Take a beach day. We’ve been suffering through a muddy spring, pining for zinc oxide and sandy shoes all winter and it’s a dead Thursday in late July. The markets will be here next Monday. If you can’t make it to the shore, grab a book and go to the pool.

Ape-skate, vacate and blow this pop stand.

JJ

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Charts and data CQG and Bloomberg

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