phase locked
market vibes
October 6….)
“The land fell into fewer hands, the number of the dispossessed increased, and every effort of the great owners was directed at repression. The money was spent for arms, for gas to protect the great holdings, and spies were sent to catch the murmuring of revolt so that it might be stamped out. The changing economy was ignored, plans for the change ignored; and only means to destroy revolt were considered, while the causes of revolt went on.” Steinbeck, Grapes of Wrath, March 1938 (Painting T. Hart Benton)
Redbook same-store sales at 8:30. No other economic data. Bowman, Bostic, Miran, and Kashkari speaking at various times today. In Europe, Lane and LaGarde on the wires.
In the news, Macron’s PM quit after 24 hours yesterday. This is Macron’s seventh PM since 2017, and the fifth in less than two years. If France falls to the right Ukraine will capitulate, I think. Japan elected a woman PM overnight. The yen gapped lower. Trump says federal layoffs are coming if the shutdown drags on with no end in sight.
The oil market is heading for an immense surplus in early 2026. How large? “Cartoonish,” reckons Macquarie Group Ltd. via BBG, a bank with a huge commodities business. Javier Blas sees a tsunami of supply coming in 2026. OPEC increased production by 137K barrels again over the weekend. On the NYMEX, this morning’s rally is underway, ostensibly because it was only 137K.
As Trump’s various forms of economic stricture shut agencies and cut the cost of the federal government, shit flows downstream to the states. Virginia is making people pay taxes on their cars, trailers, campers, RVs, and boats every year based on their value, a trend that will certainly devolve to cities and counties and no doubt migrate to other states soon. Bullish for AI. Bad for jobs. Mamdani will lead it from his pulpit.
In the markets
CME yen futures are lower. If prices develop lower with authority on volume and rising OI, a downtrend will rally DXY towards 100.
DXY’s multiple tops at 98.32ish represent a formidable resistance area. If/when broken, it could imply a new FX regime for dollar pairs. Usually, a higher dollar is a headwind for precious metals.
Open interest in gold rose 19K lots this morning on abruptly declining futures volume on Friday, and the entirety of all gold in the known universe is in variation credit this morning. Narratives are uniform: political instability in Washington, Europe, and Asia with a smattering of civil unrest in blue states at home.
Silver is up in quiet trading. The absence of growth in open interest indicates the shortage of futures is unchanged. My guess is the entire short side of the Comex is a petrified commercial hedge position. The Dec roll should be interesting. However, most of the narratives in silver are in the price, and so far the markets are managing derivatives and trading is orderly. Net-net, no one has capitulated; just rolled their risk forward.
FWIW, Silver is the Greek god of moral hazard. In every major squeeze in the past, Wall Street did not cover, ever. In 1980, 1997/98, and 2011, the shorts got out whole. The Fed or Treasury or other influences forced the longs to either stop buying or sell.
The stock market is up. Despite all earthly travails, I see zero signs of recession around me.
Developments in BTC futures are improving but, not unlike silver and gold, less than frothy. Average entry prices for 50% new longs are north of $120,000; I think that’s ETF flows buying the top of the range. The question is, what will the buyers with better location do? No new narratives; the usual instant-millionaire stuff in meme-coins but no macro.
In other markets, oil is higher but well contained in its recent range. Copper is lower. PGMs are higher, but trading is muted.
my vibe
A healthy mental exercise for every owner of stocks would be to puzzle out what could be bad for stocks, meaning what bad news would the stock market validate with lower prices?
Better said, what is your good news? If you’re long stocks, that’s not a puzzle. If you’re a lawyer, a doctor, an accountant etc… that is not a puzzel either. Is H&R Block a short sale? If AI is that good for the obvious few, what issues should we be shorting? A lot I think.
The dollar looks bid, but it might fail at the top of the range again. Usually, the more times that a market returns to resistance, the higher the probability it will break through it. Gold and stocks are phase-locked for now. JGB yields hit record highs. All the news is meaningless. If you’re going to trade on it, fade yourself!
have a lucky day…
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.
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. Market vibes makes no representations as to the accuracy of data or any attributions.
does anybody have any questions?
Oh to be young again....You could put a photo of that performance on a Grecian Urn.