evening wrap, july 23
market vibes
Trading these markets be like …
The high tick in gold this morning was on the Comex opening bell. Prices fell $25/toz and paused until the opening of the stock market, when another wave of selling took prices under $3400.00. My sense is the same seller was benchmarking two fills in the opening time samples of Comex and stocks.
It could have been a million ounces or more. We’ll see what OI has to tell us tomorrow. For a second day in a row China did nothing overnight on a strong NY close. Keep that in mind…
In daily data gold had an outside reversal down, indicating (to me) the buyers who entered early in the week are probably out.
Things to watch: In longer time frames, this is the fourth month of horizontal activity at the top of a 22-month trend. After today’s failure a new monthly high for July is unlikely. A new low for the month of July < $3290.20, especially after this rally, would be a red flag, meaning prices traded right through the POC at $3345.00 and made a new low for the month. Usually, you want to trade with new lows or highs for the month.
(Comex gold monthly data.)
Silver fell in sympathy with gold but not like gold. Tiny ranges higher every day have a completely different character. For the time being, silver is in a structural deficit, and there is a sizable short gamma position in SLV.
Copper made new all-time highs today on low volume and a slight improvement in open interest. There’s not a lot to say about futures development other than demand narratives are starting to gain credibility. It’s hard to get in late in a move if it is in fact late. However, new highs can just as easily be the beginning. If that’s the case it just harder.
S&Ps made a new all time highs again today, the Dow and NDX did not. Technical decrepitude in the index continues apace as prices shook off an early dip and rallied on vanilla news. OI in NDX is falling as well. The Dow hasn’t made a new high since July 3.
In WTI DOE data was a push. Runs were unchanged. Production fell 100k bpd (barrels per day). Imports fell 400k bpd. Distillate stocks were up 2.9 mm barrels which took some of the sting out of the crack.
Sept Oct made new lows for the move. Flat prices settled unchanged.
The Sept/Oct fly made new lows, indicating lower demand for spot barrels and continuing weakness into October. Gasoline cracks were a bit higher and heat cracks were a bit lower based on inventory data.
In other markets, bitcoin continues to auction the same range at the top. Bonds and DXY were a a few tix lower.
my vibe
Today was the first day in a very long time that stocks and metals traded in the fast lane. Big moves in metals, up and down. New highs in S&Ps. Big banks leapt higher. Gold fell $60, high to low. Copper made all-time highs. Silver missed a $40.00 print by $0.09.
Gold is discounting a weaker dollar and global inflation with a balanced auction at the top of vertical trend. Copper is discounting rising demand in a new era of AI development. Silver is discounting all three with a crusty short fighting it all the way up. According to Kobeissi, institutional sellers are feeding the ducks and stocks are in the red zone …however, the Dow is 100 lower as I write.
These markets are hard to trade; easier to own. Even that is hard if you’re getting in here. So, I am focused on copper, (late entry & stops) and natural gas (early entry buying breaks). So much has happened so fast in the last six months, if I don’t act the next six months will fly by and I’ll still be here.
night all… good luck in Asia
JJ
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Gold sold off as equities rallied. I didn't watch it closely but got the sense from the headlines the move in equities was due to some positive noise about a trade deal with the EU. My thinking is that the reason Gold challenged the highs is because it's pricing in the possibility of Powell's sacking - which isn't going away. The egulfing candle at the ascending triangle resistance doesn't look good for longs (like me), though.
it's funny, you mention the Dow hasn't made a new high since July 3 like its a disaster. is it supposed to make one every day?