evening wrap, october 8

market vibes

“A crooked tree lives its own life, but a straight tree is turned into wood.” Chinese Proverb (via Figen)

S&Ps managed to make another all-time high by less than 1 point, .75 bps. Silver made a new 14-year high at $49.19. Bitcoin did not make a new ATH but it was up $1500.00. Of course, gold sang another aria today, trading a new all time high of $40.81.00 in Comex December futures. So… there it is. All positively correlated markets are maintaining their lockstep activity.

We’ve reached a point where a $60 or $70 dollar 1.5% move in gold is normal. A dollar in silver at 2%, same idea. The trends are consistently up without pause and without a lot of cheerleading because rallies are not happening in NY. These ranges may feel bigger because the stock market is usually moving in basis points and there is no shortage of cheerleading in stocks!

Oil rallied again because a mix of narratives has come together. The 18th iteration of European sanctions yesterday, a new “peak oil” narrative that essentially says global oil production is maxed out except the Saudis who are lying about being almost maxed out, and… there is the Ukraine is winning narrative. I honestly think the oil market is long here despite a chorus of reliable sources, including the DOE, BBG, Macquarie, and other wall streeters… saying we’re moving into a period of rising supplies. For now oil is balanced.

In the markets

Gold is advancing in an orderly but accelerating trend. The community of buyers is growing and volumes in all products including ETFs, futures and mini futures are rising daily. COSTCO is doing a land office business selling coins from a vending machine.

I noted some previous volume extremes in the chart below and gold futures are approaching those levels despite conditions I outlined in open interest this morning. Bottom line there is no sign of failure in this move.

Silver is trending nicely but volume is decelerating and like gold OI is flat. No sign of failure but yesterday was unusually soft. I think it’s a lull not a sea change. I have read reports a lot AUM is going into SLV and we’re going to have a large SLV option expiry on the 17th.

S&Ps did not exceed today’s highs of 6803.50 in the day session but extended the range up to 6805.00 in the post close. I don’t expect any changes in OI tomorrow and volume was typically very light.

In other markets the dollar was higher, the yen lower, the euro lower, oil higher but well off its highs at the close, and bitcoin was higher. My guess is bitcoin might move overnight seeing S&Ps advancing as Asia comes in.

No vibe tonight. Keeping it short. Finally feeling up to going out for a beer and a burger.

“no duh” from 2012 (5 mins)

and… a little winehouse

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.