evening wrap, june 26

market vibes

9:04 PM EDT (a little late tonight!)

“Chains of habit are too light to be felt until they are too heavy to be broken.” Samuel Johnson

Markets see what they want to see, and today was one of those days. Personal consumption was expected to be down -0.2% and came in at -0.5%, which was enough to buoy the 7-year note auction and add fuel to the FOMC cut narrative (July?). Inventories were weak; durable goods orders (a 5-year high) were sizzling. The stock market saw “Goldilocks,” and away we went.

The firm side of data today did nothing for the dollar, which was an interesting tell. Gold opened at $3,350, traded down to $3,325, rallied back to the POC at $3,345, and closed at the POC again. Silver and copper closed firm. Platinum closed up $85.00 at $1,415.00, up 13% in 4 sessions for another 10-year high. Palladium ripped 9% higher bell to bell… Inflation? You decide.

In oil, after all was said and done between Trump and the press, there is no war, and there is no peace. CNN and their ilk are determined to call Trump’s gambit a flop, and the markets don’t care. As far as America is concerned, it’s over. The nuclear caper is done for years. If Iran and Israel want to go back to bombing each other, that’s their business.

In the markets

S&Ps closed about 81 points from a new contract high in September futures but there were some record highs in cash indexes. If you recall, Bitcoin made a record high in spot on May 22, but futures did not confirm it. Since then, the coin has been wandering rangebound above $100,000. I knew a great trader back in the day who used to say, “Dimes count.”

Tomorrow and Monday are going to be tricky. I think there will be selling late in the session. If I’m wrong it should be obvious.

In other markets, oil chopped up and down, rallying on clips of the Iranian parliament chanting “Death to America”. Technical development has slowed to a halt. Ranges are compressing, a POC is developing at $65.00 basis August. Oil needs a little time to heal. If I see good rally, I plan to sell it.

Front spreads are elevated, but inventories are seasonally normal; falling from May to September. Norway is producing and exporting more oil than ever. KSA is raising BPD again in July. US crude production is near record levels. Runs are high. Imports and and exports are normal.

For now, the gold market is perfectly balanced at $3345.00.

Finally…this chart is is instructive.

my vibe

I have been complaining about low volume and falling open interest in S&P futures for months. I was convinced the market was losing depth and flows and that meant the trend was dying. Maybe not.

Maybe the new stock market operates like a Robotaxi programmed to accommodate variable traffic at agreeable speeds, and it learns to improve with the passing of each microsecond. An AI taxi doesn’t move unless it has a passenger, explaining the last 3 days of zero ranges and unchanged settlements. No input, no output. Today stocks rallied.

All tradable information is written by AI and read by algorithms, which is why there are never any narratives. Temporal affairs have zero effect on prices. Human events can be edited out of conditions. The new stock market market is invulnerable to everything except divergent flows and those can be rejected by the exchanges.

Market makers are in control. Algorithms and servers are proprietary and linked by rules to exchanges and dark pools, not unlike when members in the pits were aligned by rules in open outcry trading. It’s the same model operating at lightspeed capable of enetering and execting up to 11 million orders per algorithm per minute (Grok).

So…I’m not asking what “investors” are thinking anymore. There are no investors. I’m asking what algorithms are reading at lightspeed and I’m learning to anticipate their behavior. Old habits are hard to break, but I’m getting better at it. Being flat at night makes it easier.

once terrifying, now meaningless

terrifying

Night all…good luck in Asia

JJ

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