metals, oil and everything else
@Alyosha745 on X
April 30…)
The Fed meets at 10 EDT to assess progress on inflation
In the news
The press in Japan says the BOJ is mute on intervention activity in deference to the FOMC meeting (BBG). I think the BOJ’s exporter clients are not in a hurry to blunt the breakout in JPY. And from a distance the longs in Yen have yet to capitulate. CME Yen open interest tells the story with simple arithmetic. When that unwinds, wherever the Yen is, it will stay there.
Diversity has found its way to Central banking: the Fed is too tight, Japan is too loose, the ECB is just right. Most of Europe reports GDP and CPI today. BBG says, “[Europe] is exiting the shortest and shallowest recession, ever.” No doubt an ECB cut is on the agenda at the Eccles building today.
In lighter fare, I was agog to read yesterday that Taylor Swift took the top 14 spots on Billboard's Hot 100 chart, beating her previous record of ten... That a somewhat frumpy girl next door blossomed into a billionaire media Goddess in America today, utterly debunks the narratives of white hate and millennial impotence. Just sayin’… Money may be unfair, but it never lies.
In markets this morning
Silver is breaking lower from a well-formed bear flag. I see increasing support from the single print breakout void noted on the chart below. Open interest has been motionless for days in NY so, It’s likely the Chinese are getting antsy. I covered the Chinese in gold and silver for 6 years after the GFC. They are not predictable.
Copper made new highs for the move yesterday. It is hard to stay objective about copper considering all the FUD on the wires, including “sell in May and go away.” if copper were to revert to its traditional predictive character, its message would be “cuts in June”.
So, I looked at other correlated consumers of copper like home building and lumber (chart below). Maybe copper is saying lumber is a buy. We need houses. The migrants need houses.
And global auto sales look heinous (this chart is more than a month old) but still good to know. The question is, are cheap things going to get more expensive or has copper lost its marbles? We’ll see what Powell thinks at 2:30 this afternoon.
Gold as usual is indifferent to such earthly debates… or the Fed, the Yen, stocks, bonds, whatever. Aloof, just doesn’t quite say it. Comex gold OI has not budged in a month. Volume has practically ceased to exist.
And Net spec length simply stopped in its tracks on March 7. But this isn’t a new thing for the relic. Gold has been in a pattern of perodic rallies and quietly counting its money offline for months.
PM ETF holdings in gold fell on trend yesterday because … someone is selling them
Miners… If you go on Google and look up cash cost for copper miners, AISC is cheaper than gold … which is for gold miners as of numerous reports in March, about 50% cheaper than yesterday’s Comex June settlement.
If gold were an innovative device like an iPhone or a Tesla and AAPL or TSLA beat earnings every quarter since 2021 and they did it by 53% above estimates in Q1 2024, how you think the stock market would value their forward PE?
I know this has been a ubiquitous chart lately but I’m posting it anyway as if it were a fascinating work of art.
My vibe
Correlations are fine until they’re not. Divergences are dangerous, especially radical divergences because radical divergences mean radical mistakes. And there are are so many of them in these markets. Are the miners wrong? Is copper going to $10 dollars? Trading them well is just good guessing…The deficit… soon to be 40 trillion by May or July 2025, is probably the best indicator. The money has to somewhere.
Did you know a mule can live to be 50 years of age?
**always a taker of ideas and views. good luck today.
JJ
Charts and data CQG and Bloomberg
Various thoughts 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. Various thoughts makes no representations as to the accuracy of data or any attributions.











I'm enjoying these thoughts. Lots to think about!