evening wrap

market vibes

April 14…)

“The older I get, the better I used to be.” John McEnroe

The NY session was uniformly quiet, featureless, and rangebound on Monday. S & Ps were a choppy affair, no news or data. GS beat. The Fed’s Waller was sanguine about cuts.

Bonds were higher, but there is still the shadow of retaliation lingering from last week. Volume was understandably very low.

COMEX June gold came in $20 lower, extended its range down a few dollars testing Friday’s highs, and recovered. Prices closed down $20ish, posting an inside day.

DXY was lower all day. Yen and Euro futures were correspondingly higher, posting inside days.

Silver ended the session where it began after a few cents of range extension up and down.

Copper (next chart) and platinum, in that order, were the bullish outliers in metals today, trading nicely higher on the day and copper extended its range into last week’s sell void with relative ease.

A word about voids, if I haven’t mentioned it already. When markets find balance, they stay there and trade, creating a point of control (POC). That becomes the most actively traded price in the time sample. POC can dominate ranges for months or years but usually when the market are busy a few days or a week. When they move away from the POC, for whatever reason, they often create voids, areas where there is zero liquidity, the opposite of a POC.

Two things to remember. A void can be an area of resistance where, as prices return to it, responsive selling enters, or … they can remain voids and go right through the area again with no resistance because the sellers going down and buyers going up are the very same cohort. The strong side of the market stays passive. In brief, it is a dangerous place to trade unless you have to.

NYMEX June WTI opened on the highs, fell $2.00, and rallied back in the afternoon to close +0.25/barrel. The tone was the same as all other markets: low volume and thin trading. The curve fell again, front to back. May was the weakest month, trading +0.16, vs +0.26 for June, and +0.36 for July after the close. Dec Red fell $.05.

My vibe:

Sentiment is cautiously bullish in stocks. “How low can it go?” vs “Trump is a wrecking ball trying to crash the market.” Technically, the wiggle was a great opportunity to get good location, but I traded out of S & Ps last week. We are at the top of a scary vertical range, and as I cautioned about silver this morning… not an optimal entry for length.

Gold is well maintained at these levels with no sign of failure in the move. Silver and copper are trading in the middle of these voids but they are not being aggressively sold or bought (OI is plunging). Gold obviously makes me friendly to both. The GSR traded under 100 today after trading 108 in the heaviest selling of April 3 and April 4.

Oil is developing horizontally in the low $60s following a $14-dollar collapse. I think that is bearish development. I plan to sell a rally towards $62/$63/barrel if we get one.

FWIW, every market I cover rallies and fades together since stocks bottomed last week. Since there is a dearth of humans actually mouse-clicking other than us… I think the algos may have become randomly phase-locked. Any divergence especially on news could be an indication markets are about to resume longer term trend .

…when politically correct was political comedy

lol.. when we could, we did…

Good luck in Asia…

JJ

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