evening wrap, august 5

market vibes

“God only knows. God makes his plan. The information’s unavailble to the mortal man. We work our jobs. Collect our pay. Believe we're gliding down the highway when in fact we're slip slidin' away.” Paul Simon 1978

Stocks started off higher today and reversed on iffy ISM PMI and ISM Business Activity, which were unexpectedly lower, and ISM Prices were well above survey at 69.9 vs. 67.7 expected. Algorithms were programmed to sell, and they did. About an hour later, a large TWAP buyer entered the market on the lows, and prices rotated back to unchanged for the DOW, but NDX barely moved. For the rest of the session, prices edged lower, and NDX settled a few ticks from the low of the day

This is next chart is September NDX in daily data. Last Thursday’s outside reversal down closed on the lows, and prices have been developing below Thursday’s lows for three sessions. Today’s attempt to rally and ensuing rejection was a failed auction.

It is not over for the bulls, yet. Sellers have been unable to extend this week’s ranges below Friday’s lows, but if they do, and we close beneath them we’ll have a nascent trend in daily data.

Yesterday, several money center banks warned their clients a downturn in equities is likely, including MS, GS, and Deutsche. BBG carried the story last night with the chart below, noting levels for a 5, 10, 15, and 20% drop.

NDX was the weakest of the three indexes today. Here’s a relative value chart of the DOW vs. NDX, decidedly weak during the April-May rally. Rotation into the DOW from some of the frothy tech names makes sense if Wall Street is advising a defensive posture into September.

Sept WTI went out on the lows, down $1.16 as I write. The curve was weaker but relatively steady, considering the trend in flat prices. Cracks were unchanged.

In metals, copper and palladium closed on their lows and extended their ranges lower in the post-settlement. Gold held its gains despite a $20 dip pre-Comex, and silver was up $0.50 for most of the session, at one point trading at $38.00.

There is nothing technically notable in this silver chart below. It just happens to be within a good day’s range of a 14-year high and totally ignored. On the other hand metals are like a jig-saw puzzle floating on quick sand. It takes a magician to put them where they fit.

August Bitcoin futures are developing a negative trend below the July 10 gap.

Despite a 3-year auction being characterized as mediocre, the long bond is trading at a 5-week high. Tens and fives were lower.

my vibe

There is definitely a mood swing underway with stocks wobbly, gold back in the $3400s, silver stealthily close to $40, and crude beginning what appears to be a slow grind lower in autumn. At least I’m planning for more of a channel than a plunge this time.

Nobody in oil likes crazy. Hopefully we’ve seen the last of it for a while. But ya never know, the nearer your destination…the more you’re slip slidin’ away.

night all… have a wistful evening and …good luck in Asia

JJ

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