evening wrap, September 2

market vibes

"You ain't seen bad yet, but it's coming" Truman Gates, Next of Kin, 1989.

Let’s just do the charts tonight.

All Comex Gold futures made new contract highs today, meaning every contract of short open interest clearing on the Comex tonight is in debit.

Prices continued to rally after the pit close, indicating early buying from Asia.

Comex silver futures made new contract highs in all months. Like gold futures tonight, if you are short at any price ever on the exchange, you’re losing money.

Volume was relatively high today. High volume can indicate a climax high or low if there is an imbalance of bad positioning, usually when open interest is high and narratives are frothy. I don’t see that here.

There is bad gamma in SLV, which is being professionally managed, so far, and a few billion people in Asia with silver in their DNA, not to mention a love of gambling on the exchanges. My sniff is today’s high volume isn’t capitulation by the shorts, yet. At $40 SLV it could be.

S&P futures haven’t actually gone up since July 28, except for 11 sessions in August when prices made several all-time highs by as little as 3 to 5 one-hundredths of a point. September S&Ps traded today’s lows 5 times since August 6.

This is range compression at the top of a 30% rally in circa 12 weeks. As always in ranges, we ask, “Is this accumulation of risk by strong hands? Or… distribution of risk by strong sellers?”

NDX futures recovered smartly today, but the technical picture is gradually trending negative. There is a lot of DMI red in this chart. Volume was high today.

Apart from the first 5 minutes, the highest volume of the session was on the close. One thing I’ve learned about equity traders: they don’t care about good entry prices. They care about good settlements. Jot that down and stick it on your screen.

NVidia had an iffy day. BTFD? I’ll pass.

Oil prices traded $2.00 higher in London this morning as the U.S. resumed sanctions on Iranian oil. According to scant news, the war is going against Russia, and the recent attacks by Ukraine are inhibiting refineries. Analysts expect the OPEC+ meeting on September 7, 2025, to maintain existing voluntary production cuts in anticipation of a surplus in Q4 2025. Crude is a very thin, unstable, newsy market.

However, the WTI crude curve is trending down, validating the idea of a surplus in Q4. The Oct/Nov/Dec fly made a new low today (next chart). In a bull move, this butterfly would be going up, not down.

In my opinion, there are gamblers betting on a hotter war, probably getting news from the front in London. But producers are continuing to increase production, which is why the trend in the curve is negative well into 2026.

Bitcoin rallied in the last hour with stocks.

my vibe

Two X posts by Kobeissi today are instructive: A GS indicator says CTA positioning in US stocks is at the 100th percentile of max long. And…BofA’s Global Equity Risk-Love indicator jumped to 1.4, its highest in 13 months. Margin debts is extreme everywhere (China 10 year highs) but US margin debt was a record high trillion in July.

So many markets are in uncharted waters. Bonds in Japan, the price of a good steak at the supermarket in Anywhere, USA, the money supply yada yada. LA is one letter short of Hell so is the UK. If T.S. Eliot were still writing, he might want to rethink that bit about April being the cruelest month.

President Lincoln said governements “cannot long endure,” at Gettysburg in 1863. And he said “a house divided can’t stand” in 1858 five years before that battle. Do we have that much time left? I wonder.

Gold and silver are trading at all time highs as I write. A market that clings to its highs usually means unfilled buying below.

lol… for all of us waiting for it for so long…just beautiful

see ya tomorrow…

JJ

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