evening wrap, november 24
market vibes
“Never fight fair with a stranger, boy. You’ll never get out of the jungle that way,” Death of a Salesman, A Miller, 1949
Whether by cosmetic design or an overdue response to value, precious metals, oil, stocks, and bitcoin all rallied in concert from the get-go on Monday. Apparently the rate-cut bubble that popped on the NFP report last Thursday was patched up to un-pop the AI bubble that started popping last Tuesday before Nvidia’s Wednesday report.
The steamy 119k NFP surprise deflated the AI-layoff narrative, but it killed the rate-cut narrative and the S&P lost 2 trillion in an hour. But not to worry! On Friday morning, John Williams of the NY Fed said he favored a rate cut. Low to high, the S&P rallied 250 handles. But bitcoin crashed anyway… (maybe not). Oh bother. We can’t have that! Lest we forget: January 2025…
This morning Chris waller said he supported a cut and Mary Daly reaffirmed a dovish view as well. The FOMC might be split 50/50 so the statements were timely for stocks today.
In the markets
S&Ps rallied on the opening bell for 2 hours and went on a glide path higher for the rest of the session, closing on the highs. Apart from some pretty spectacular flip-flopping by Fed watchers and some chunky liquidation recently, the stock market is still 2.5% from an ATH. FWIW… the AI-bubble narrative is dead. Alphabet has taken the baton from Nvidia.
Silver rallied 3.2%, posting a solid DMI – 1-bar false positive. I suspect open interest will be higher tomorrow. Volume was lower than Friday’s, but trading on COMEX was relatively active. Support at $50 is growing.
These consecutive lows at the $4,010.00 point of control in gold are developing organic support as well.
US copper stocks are plump and ready for AI data centers… gluts in oil and copper…rhyme nicely with cuts.
On the NYMEX 3-2-1, crude and spreads bounced off the October lows. Liquidity is withdrawing like a low tide at the seashore. Something is coming…
… and cracks are down 15% in 4 sessions.
So far… the petroleum markets are still not validating a glut! Credible reporters have been saying oil at sea is at record levels for many weeks… either they are wrong, lying, or it is being deliberately held offshore. What are they waiting for? Despite intense curiosity for facts, the press has decelerated its coverage on the subject.
Bitcoin… a well-formed isolated low on high volume on Friday. It looks like a rally for now, if not the low for the year.
In other markets, DXY is inert. Bonds are quiet on the highs. The yen trend is like lava—slow but unstoppable, imo.
my vibe
The obvious conundrum between these dueling narratives is that mutual inclusivity is a recipe for failure. Lions do not lie down with lambs. They eat them. If esteemed influencers say they’ll vote to cut because the labor markets are weak, that inures to the benefit of AI creating even weaker employment. It’s like giving your kids swimming lessons in a shark tank. It’s also obvious the “jobs” are the “lambs.”
However, risk-on is manic not trending! The lions are driving everything in markets higher except gold and silver, which will call bullshit on all of it one day. After all, gold, stocks, bitcoin, and treasuries are all competing for the same prey in the jungle… you! Who will you lie down with? lol… Just kidding.
night all …good luck in Asia
JJ
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I promise this is relevant.
I cancelled Grok Heavy today. I had found myself questioning Grok more and more in recent weeks and using the lesser versions instead of Heavy because 90% of the time Heavy would fail (time) out after 5-10 minutes of running its agents on a query.
But those weren’t the reasons why I cancelled.
I loaded up GeminiPro this morning. Subscribed to its Grok Heavy equivalent and started to use it. High level: GeminiPro outclasses Grok Heavy in every conceivable way. From reliability to function to feature set to speed.
This is hard for me to say because (1) I am an Elon fanboy and (2) I despise Alphabet. Alas, you have to give the devil his due.
So why the shift? Today, 3 distinct reasons:
(1) I saw a simple opportunity for a test question for Gemini, 12 minutes before the close today. I was pretty confident as to the why we saw a spike 12 minutes to close so I wanted to see what Gemini would think.
https://g.co/gemini/share/194903e546f7
Correct.
“Groks 4.1 (Thinking)” answer to the same prompt?
https://grok.com/share/bGVnYWN5LWNvcHk_6bbd64b3-90d0-443c-a766-5d6075f9d462
Wrong. Down to getting timezone wrong. 5 hours off the mark. Just a fairy tale.
Grok Heavy answer (after 15 minutes mind you)
https://grok.com/share/bGVnYWN5LWNvcHk_7c32a0c9-d7cd-4c0b-acbf-4eae7453f295
Less good than Gemini but better than the atrocity it put forth as facts as 4.1 (thinking).
(2) My grandmother is 100 years old. About a year ago my mother asked me to try and restore this photo taken of her a long, long time ago. The photo, as you will see, is well beyond the capability of anything that exists currently. Until today. I uploaded the photo to Gemini, then I uploaded 3 reference photos of my grandmother. One from when she was a teenager. Two from more recently. I then asked Gemini to try and fix the photo from the provided reference. Here’s what it did. You can see how thrashed the old photo was. Now I should note that it’s not a perfect recreation because I only had 3 pictures on hand. I plan on supplying Gemini with many more to see what results I can get, but I am confident given the initial test that it will actually recreate the picture. Mind blown. Grok told me about the picture like it was a live action roleplay. Heavy failed to even try.
Here is the result:
https://imgur.com/a/wXxoU5x
(3) My dad died a long time. Late 90s. As those that have lost ones in the pre-iPhone era know, pictures are often very difficult to come by. They’re all over the place, and in a family the size of mine, who even knows.
Anyway we have this old video of him returning from a business trip from Amsterdam and we always thought it was a beautiful picture of him and my mom reunited after not seeing each other for 2 years. The problem was it was a screenshot from a VHS video.
Now I have tried to fix this picture many times. Including with Grok; Fotor, Photoshop, you name it. Always with terrible results.
Anyway I decided to give it Gemini the test. I had low expectations as nobody had been able to fix this picture to my liking.
https://imgur.com/a/VviKUV9
Lo and behold. First try. Home run. I literally cried. I couldn’t believe it. It had made my dad look more like my dad than the grainy old video still.
So in the interest of science i put the exact same prompt into Grok Heavy. Grok 4.1 (thinking). Maybe it had gotten better.
Warning, it had not gotten better. What follows is a real interaction in real time with Grok Heavy to upres an old pic. I really just want to drive home the point that this is not a joke. This is what Grok Heavy thought was appropriate.
https://imgur.com/a/a1ZjVdZ
I wish I was joking. I stared at this picture for a half an hour. Laughing and crying because it was so outlandish.
And that is how I realized we’re now left with Gemini, OpenAI and a handful of other serious AI competitors and a lot of absolute -certain- failures.
I remember this line from 50 years ago "I could drink a case of you and still be on my feet." I never knew what she meant, but it was Joni, and you were never sure of what she meant, as gifted a communicator as she was. Nice pick JJ, as it relates to markets now.