evening wrap
market vibes
December 3 … )
“Markets can remain irrational longer than you can remain solvent.” John Maynard Keynes
Apart from a few modest highlights in metals, NY markets discounted a murky collection of news items today without breaking a sweat. The early news from France was interesting if you owned French bonds but that soon faded in favor of a kerfuffle in Korea. Elsewhere, the people in Gaza are suffering severe starvation, sadly. China’s RMB did nothing, and Macron said “bring it” from Riyadh. The vote of no confidence is tomorrow. Narratives that trump will play small ball in his early days are going around the in the MSM.
In the markets
S&Ps (chart below) managed another new high by 1.5 points or .0002%. Most of the session S&Ps and the Dow were down small money but NDX was stubbornly unwilling to follow them.
For all its tenacity, NDX (next chart) missed an ATH by an equally tiny amount, .0003%. There’s an awful lot of furious effort being spent to stand still in stocks. But hey, they are not going down…Maybe tomorrow…maybe on Friday things will pick up.
Copper rallied in Europe but it hit stiff resistance in the void when Comex opened. Silver rallied back to its November POC in quiet trading and closed on its highs. Silver and copper seem to be moving together.
Gold was briefly well bid and settled +$5.00. OI stopped going down. The 1 bar false positive (encircled) can be an important pro trend indicator. However there has been no follow through since the sell off November 6 through 14. This recent 5-day range doesn’t strike me as sell side distribution. Gold is just sitting here watching the markets.
Oil was higher on reports the cuts will remain in place until March but the consensus that markets are oversupplied is uniform. In bear markets the only thing to watch is supply. In bull markets the only thinfg to watch is demand. if you’re always reading about supply, you’re usually in a bear market. Bonds, FX and bitcoin were mixed and featureless today.
USD/JPY was unchanged but the chart could easily turn bearish.
Last up this from Zacarrdi: GS: Probability of a US recession in the next 1 year…Market-implied 23%, GS 15%. Btw, they are steadfastly bullish on stocks.
my vibe,
NFP will come and go. The Fed will cut or they won’t. Either way stocks will probably tread water until January but the list of risks is long, not the least of them extreme positioning and extreme concentration. Is another cut worth doing? No one knows.
Gold is finding a range in the mid 2600s but it will move on anything definitive in FX. Gold is not correlated with dollars per se now. Gold is correlated with volatility full stop… and looking for it.
Finally there’s very little transparent length at risk in gold and immense transparent risk in American equities. On these two points I refer you the quotation from John Maynard Keynes at the top.
Chill with a nice sip of Johnny Black
Good luck in Asia.
JJ
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