evening wrap, october 6

market vibes

It’s October. The zombies are everywhere. Open interest is dead and falling. Volumes are dead and falling. Every morning the stock market gets out of its coffin and goes to a wake for the living dead.

Another batch of record highs rolled off the assembly line in NY markets today. December S&P futures, alas, missed a fourth record consecutive high (5 including Sept. 30) for the month of October by 2.25 handles but settled at a new all-time high close. Gold and silver continued their vertical ascent in unusually dull trading, with gold posting a new all-time high and December silver closing just $1.60 shy of the mythical $50.00 dollar high.

S&Ps daily data chart below

Bitcoin added a new record high to the tally as “Investors poured $3.2 billion into a group of 12 US Bitcoin exchange-traded funds last week, the second-highest haul since they launched in 2024,” according to BBG in a note posted at 2:00 p.m. this afternoon.

On the CME, October BTC futures in continuous data missed the July 14 futures high by $615.00. IBIT volume was a modest 68 million today, but Friday’s volume was a more robust 82 million.

On the NYMEX, dueling narratives do battle this week with a group of analysts saying OPEC is outright lying about production increases and Macquarie Bank and Bloomberg saying the amount of crude afloat is already a glut. The chorus of “oversupply” has been around since the JMMC said last April they were going to reinstate 2.2 mm bpds of suspended quotas… which they have done they say. Others cry liar!

Did I recently write, everyone lies in oil? At any rate the market seems balanced where it is but the front of the curve trades soft and uncertain.

December gold just traded $4000.10 in Asia for settlement October 7… another new all-time high.

In daily data, December gold open interest has been falling since Sept. 22. October deliveries were unusually large at around 30,000 as of October 3, which is unusual for October because no one has actively traded October since the late ‘80s.

This is not independently positive or negative information, but a bull would rather see rising OI with rising volume as prices approach $4,000. Usually, falling OI and rising prices mean short covering.

Silver made a new 14-year high on moderate volume and died. It was clearly apparent to me that no one was buying silver today. In fact, it has been sluggish since its mini plunge on October 1. However, it’s no different than gold or S&Ps or Bitcoin. deadsville… PGMs, and copper … all same.

DXY failed at 98.00 again. The yen did not rally. I don’t think it will; the memo has gone out that there is a new PM and she’s a low rates, stimmies, and run hot gal. The euro did rally, and at 57% of the index, 98.00 remains a barrier.

In other markets, most soft commodities like cotton, sugar, coffee, corn, beans, wheat are still trading at the very same nominal levels they traded 50 years ago. Technology feeds the world. I think this is instructive when considering the future of AI and oil. Food for thought

my vibe

It’s hard to tell who’s winning. The stock market is eyeing gold like a jealous wife on a topless beach. Bitcoin is saying,”I am the future.” In oil it’s liar liar. The day will come when we will look back and say “I should have bought this or sold that.” These are the markets you will remember when they’re gone. Try not to regret them.

In the north country on the Canadian border, there was for many years a restaurant called “Wink’s Reel’em In” in Dexter, NY; not a gastronomic must for a foodie but a local diner that cleaned and cooked whatever you caught. That name for me was unforgettable.

Maybe it’s time to reel’em in?

I’d love to go to Prague on day…

nice

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 free or paid-up subscriber. Thank you.

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.