run hot

market vibes

June 5…)

“There is no put.” Diogenes of Sinope 350 BC

Challenger Job cuts dropped to 47% contrary to the latest concerns about AI layoffs. Another dovish surprise in jobless claims at 247k. A metric that never moves is moving higher. The ECB cut .25 bps as expected. NFP tomorrow.

In the news

European exports of scrap metals that aren’t subject to tariffs have spiked 273% year-on-year in the first quarter. For scrap gold, silver, and platinum, the situation is similar, and they are explicitly exempt from reciprocal tariffs. US refineries might be worth a look for a few shares.

Trump tightened the border with travel bans for 19 sketchy nations (Venezuela, Afghanistan, etc.) and signed an executive action preventing foreign nationals from entering the US to study at Harvard. I posted a link to Bill Ackman on Harvard and their portfolio last night that didn’t load properly. Here it is again icymi.

I don’t think there is any way Harvard can win this, especially after Dean Claudine Gay’s plagiarism kerfuffle. Buffett says, “Reputation above all,” and Harvard has severely suffered damage to theirs for money.

In Oil News

Iran accused the International Atomic Energy Agency, a UN watchdog, of slander and presenting sloppy evidence, escalating tensions ahead of a key meeting in Vienna. Iran has manufactured a record volume of uranium enriched just below the levels needed for nuclear weapons, and Trump is not the only voice in the choir on this.

In the Markets

Silver is making new highs in all fractal samples this morning. In weekly data, open interest is about half its previous high during COVID. Volume for just 4 sessions in June is already 38% higher than the last week of May.

In daily data, the contract high for July is $36.10. A new contract high would put the entire short side of open interest in debit at the clearing house. If the CME raises margins, it puts the most pressure on the weak side of the market.

Shorts must meet higher margins to stay in, and the longs are out on the golf course, wondering what the poor people are doing.

There is a lot of buzz about LME copper inventories and some tightness at key producers this morning. Inventories are a very fickle indicator. Metals are like three-card monte. However, when the market validates a drop in inventories with prices, we should play in the same lane. If that measure goes lower and copper makes new highs, the narrative is probably real.

COMEX copper, like COMEX gold, suffers the deliberate exclusion of Chinese participation, and China is the dominant force in copper and gold. However, you can still make money on the COMEX.

Or grab a few shares of Freeport, just cresting its 200-day MA. Will copper finally deliver on its aging shortage narrative or the AI data center narrative? Probably. Is this the time to get aboard? You decide. If Trump hits a home run, copper could be the leader.

There’s definitely an uptrend in monthly copper data. That volume spike last year (chart below) was the BHP Anglo buyout that fizzled and the May-July COMEX roll squeeze that China caused by boycotting US inventories. There is definitely a scary supply story smoldering in copper. FWIW, a shortage of copper implies a shortage of silver. Just sayin’.

S&P 500 futures saw 2,270,000 lots traded in 48 hours, with prices moving less than 0.1%. Open interest rose 2,000 lots yesterday, a 0.1% increase on 2 million aggregate. No further comment. Modest range extension higher on data and narratives; an FOMC cut is imminent by September.

Bonds are trading higher on falling OI. Bloomberg is blasting a fully priced rate cut in September after the ECB cut at 8:30 this morning and dovish jobless claims. The R word is not mentioned.

Oil is higher. OI is higher, gasoline is weak. Commercials are heavily long. There another war in oil.

Bitcoin is doing a fine impression of the stock market again today. A microscopic range, zero technical behavior. OI went a little lower yesterday.

my vibe

Copper at $5.00/lb, July platinum +$40, silver +$1.30 with a new contract high at $36.15, and gold up ~31% in 2025. Speculative length in gold and silver is ~50% of all-time highs, platinum ~33%, and COMEX copper ~50%, with LME taking more risk. These aren’t crowded trades.

There are only two ways out of this doom loop of debt: inflation or deflation. Trump is not afraid of inflation… or debt, for that matter. The congress coundn’t care less. So, the tax bill will pass (it always does), opening the door to run hot 2.0. IMHO.

seasonal phenomenon? Never heard of it

so weird…

PS a very late start today… sorry!

Good luck today

JJ

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Charts and data CQG and Bloomberg

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