evening wrap

market vibes

February 6…)

Sanctions on Iran and select shipping-related oil trading in the Middle East caused a minor rip on the NYMEX when it was announced, but the rally was short-lived as responsive selling in crude swapped it. March WTI closed on the low of the day.

I mentioned lower crude improving margins throughout the week. As you can see, March gasoline hasn’t traded below its January 27 lows for nine sessions.

Before I get into an outfielder’s view of home plate in equities and metals, I’m going to share a monthly chart of CBOT 30-year bond futures. The red and blue bars in the chart represent a 10-period MA of Wells Wilder’s genius creation, the Directional Movement Index.

We have only seen three blue bars since February 2021in one of the most profound trends in any market since COVID. Open interest is at all-time highs in monthly data (meaning it only settles on the last day of the month).

Nothing that created this trend is in force now. No pandemic, no “run hot”, no crazy spendthrift Congress, no banking crisis, and no inflation. In my opinion, oil is going down. It doesn’t take a lot of imagination to see a few blue bars in 2025. I noted the September 2024 highs, which should do the trick.

Next up, stocks, gold, copper, silver, bitcoin, and some old-school ideas on margin calls in the vibe...