thanks a trillion
market vibes
October 18 … )
“They were careless people, Tom and Daisy—they smashed up things and . . . then retreated back into their money.” F Scott Fitzgerald
In the news
David Einhorn says Buffett’s equity sales underscore how overvalued the stock market is. Most sites tracking the Buffett indicator are above 200% (the Wilshire 5000 ca $60 trillion divided by GDP ca $29 trillion). However, previous correlations between the metric and market tops would have long ago bankrupted any short seller using it.
BBG noted this morning that while Buffett is selling Bank of America stock apace (BAC), BAC is buying it back apace. Banks are making a lot of money. Or should I say ‘have made” a lot of money? Earnings last week were off the charts.
JPM says markets are pricing a Trump win, possibly a red sweep. What would Tom and Daisy say?
In the markets
Silver is 50 higher.
SlV Oct 18s expire this afternoon with approximately 30 million shares of calls struck between 28 and 31.50 with 25 mm between 29.50 and 31. The November 1 calls show about 4 mm shares between 30 and 32. November 15s (OI data below) are formidable with => 60 mmm shares from 29 to 35 and growing. However, Deltas are live here and there will be selling. In order to threaten gamma prices will need to drive into the mid 30s and stay there.
This is a perfect example of risk premia sellers picking up nickels in front of a steam roller.
Meanwhile gold… I offer the chart this morning without notations.
Gold in quarterly data chart below…
We are in the parabola now, without fomo of any kind, no narratives other than the BRICs meeting next week and acquisitive foreign central banks, the most expensive stock market in history, a runaway congressional freight train, wars on two fronts and the threat of spreading global fascism. Shhh... don’t tell anyone.
In this context, a balanced oil market is one of the few stabilizing counterweights to risky outcomes.
In other markets
