evening wrap, august 21

market vibes

In the stock market today, defensive algorithmic buying balanced another day of news-driven selling; news which I think should be sold. AI’s pubescence is aging. The Federal Reserve is under assault. The peace process revealed the US and Europe have no money or weapons for war, and Europe, for all its NATO members, can’t source a few boots on the ground to secure a simple peace (more on that in the vibe). It is telling how bad things really are when it is cheaper to keep fighting a war than it is to stop it. Seriously

Technically, S&P open interest is about 150,000 lots lower than it was at the same point in the March 2025 expiration and May 2025 expiration cycles and 250,000 lots lower than it was in the December 2024 cycle. Volumes are similarly lower. Said another way, stock index futures are dying on all-time highs. It is possible AI has done to the futures markets what we fear it will do to our jobs in society.

As for the trend, it is aging,too. I have learned from reading credible commentary that CTAs are max long equities. Therefore, I think AI’s owners have reverse-engineered the levels at which CTAs will begin to liquidate, and they are not defending these arbitrary dips. They are holding prices above calculated CTA triggers to stave liquidation of their longs. Just my sniff.

Sraight ahead, a few more lines on AI and its deleterious effects on copper gold and silver futures, WTI and Bitcoin, and a philosiphical anecdote illustrating the folly of premptive action…. in the vibe.