evening wrap, may 12
market vibes
Light volumes and uncertainty kept NY markets in an edgy state of limbo on Tuesday. Oil rose 3% in Asia. NDX opened down 500, gold and silver were slightly lower on the opening but rallied with copper. Bonds fell sharply on a 3.8% CPI report.
Nothing new from the SOH… It seems Trump is going to leave it until he gets back from China. He said in a gaggle that he wasn’t going to ask Xi for help. “I am going to have a long conversation with him about it. We have a lot to discuss.” Whatever comes of that, he’ll almost certainly maintain the blockade ad infinitum.
More on that strategy in the vibe and … and you’ll see why.
in the markets
WTI crude oil rose 4% on extremely light volume and a tiny 3k decline in aggregate open interest. Technically the crude market is in its 4th day of higher highs and higher lows and the DMI (directional movement index) has turned positive. The 45 day slow-stoch is flat.
Oil markets are pricing uncertainty not supply, in my opinion. If the globe was scrambling for barrels oil would be closer to $200.
I’ve posted the WTI chart in continuous data to give you a better sense of all 74 days of trading the conflict instead of 3 weeks of the June expiration cycle. Prices are still circa $20 lower than the highs on march 9.
The front spread from the same 74 day continuous perspective trading 40% lower than when the “war” began.
Copper prices, open interest and volume are in bullish lock-step. There is clearly aggressive competition for offers and an urgency for buyers to get filled. And another new all-time high close today which explains in part the turnaround in silver…. next chart.
