evening wrap, june 24

market vibes

“War Peace is hell.” William Tecumseh Sherman

Trading was generally subdued in NY today, although most markets did remain on trend in light volume. Oil fell to new lows for the week, down $4.00 on the day, and recovered a dollar. Gold made a new low for the month and recovered $25 of an $80 loss. Silver fell in sympathy with gold and recovered $0.55 of a $0.80 loss. Both gold and silver closed down $50.00 and $0.30, respectively. Platinum fell with gold, recovered steadily all day, and closed $26.00 higher. Platinum continues to outperform all metals.

Stock indexes trekked upward in typically thrifty volume, making new highs for the quarter and month. Bitcoin tagged along, +2600 to $106,000.

Jay Powell testified before the House Financial Services Committee today for an arduous two hours of tedious questions. Powell can be terse and moody, and today he looked like he was chewing a dirt sandwich. His most insightful comment was an admission that a “significant majority of the [FOMC] felt it would be appropriate to reduce interest rates later this year.”

In the markets

A weak dollar spared gold and silver from a much harder sell-off. Monday’s penetration of a four-month, four-point trendline met with responsive selling and a failed breakout. Usually a pro-trend sign, and the trend is down.

Today’s low in the DXY spot index missed a new low for the month, quarter, and year by 10 bps; however, the September Euro did make a new high for the quarter and month by 21 bps. Nothing in Powell’s comments was notably good for USD FX.

Which makes today’s weakness in gold and silver curiously divergent. Recovery was acceptable but not assuring. Q2 and H1 rebalancing would imply selling gold. It would also imply selling stocks and buying oil.

Crude prices were lower again. Trading was orderly. Open interest was up, indicating new longs and new shorts entered the market in the massive down range yesterday, although volume hasn’t been heavy.

My interpretation is most of the open interest in oil futures is spreads hedging swap deals and inventories. I think a big part of the crude curve was uncovered during the shootout in Israel. In fact, the spreads were relatively as volatile as flat prices yesterday. Today, they were quiet.

It’s not a spec market, yet.

Bitcoin is on a leash. Does it matter if stocks go higher? No, it doesn’t.

Speaking of stocks … Oil and miners were down. The Mags et al. were up. It is fitting that a virtual $50 trillion equity market would lead a similarly dimensionless Bitcoin higher in tow.

Here it is today, minimizing the cost of lifting the entirety of 500 stocks by simply buying ten of them. Does it matter how they go higher? No, it doesn’t.

my vibe

When asked by reporters in Amsterdam if he was committed to Article 5, Trump said, “Depends on your definition. There’s numerous definitions of Article 5. I’m committed to being their friends.” Apparently, this sent some shivers through the members.

No one is happy in NATO. They’re all broke.. Zelenskyy wants more money. Trump has it to give, but he won’t authorize it. Netanyahu is a backstabber. According to some, Trump burned his stones for it this morning. He did look pissed. Meanwhile, back at the ranch, stocks are about to take off. Oil is tanking. What’s for dessert?

something calm to go with doing your charts tonight

Night all… good luck in Asia

JJ

If you like reading market vibes please hit the like button, and type in your e mail below to become a subscriber.

Share selectively with friends and colleagues and follow me on X @Alyosha745

Charts and data CQG and Bloomberg

Market vibes is not a registered investment advisor, and comments are for informational use only. Any mention of a particular security, index, derivative, or other instrument is NOT a recommendation to buy, sell, or hold that security, index, derivative, or any other instrument. Market vibes makes no representations as to the accuracy of data or any attributions.