gradualism

market vibes

Sept 5 …) 

“The hard trade is the best trade.” pit adage  

Data on tap this morning:  

Challenger job cuts (layoffs) at 7:30 were 9.2% last month and came in1% this month. ADP at 8:15, due 145k vs 122 last (chart below). Initial claims at 8:30 due 230 vs 231. S&P and ISM services data at 9:45 and 10 AM expected unch to slightly dovish.  

In the markets  

Gold is basis points from an ATH at $2570.40. If prices do exceed the all time high and settle higher without a frantic display of technical fireworks, I would say that is good. Gold is the only remaining haven representing inflation sensitive commodities and any challenges to its persistence get fewer and smaller.  

Silver is continuing its impression of a vanishing Harry Potter character. OI made a new low for the year yesterday on the lowest volume since the July 4 Holiday, a low exceeded only by Good Friday and that low for 2024 by a handful of lots (chart below). Silver has disappeared, technically and so far, there’s no sign these trends are ending. 

However, prices are far more important than the participation defining them, and it appears the long term (1 year) compression POC at 29.50 is behaving like a magnet.  

I think silver prices are going to continue development in the 30 handle and from there go higher in time. As an aside I’ve seen a lot of replayed analysis about the very small number if financial entities that hold a very very high % of the total short OI. I’ve seen this stuff so often I don’t bother investigating it anymore. The banks are short. The banks have been short for decades and we are still here.  

But OI is down nearly 60k lots since May or a third of total open interest. Usually when prices and OI correlate lower it means the metal is moving into strong hands… For the ordinary observer this is in the “so what category.” For me it’s a outlier and I’m eager to see where prices go when OI reverts.  

In other markets