Dear Reader, Good Morning.
Tuesday April 30 will be my last ‘real job’ working day in a my career. I am leaving Archer Financials (a sub of ADM) to explore and enjoy what Shakespeare would call my 7th stage of life.
In the past 15 years I have written nearly 3 million words of commentary on trading and markets and I intend to keep writing here on Substack. Ironically I don’t keep copies of my daily writing. I never have and I regret it but I think this time I will. I hope you’ll stick with me.
JJ
In FX news today
The BOJ did nothing overnight. JPY ripped higher. On the CME Yen futures are presently at all time lows on an outside reversal down and the largest range in a month. XAU/USD and USD/JPY (chart below) are speaking with correlated clarity.
According to Ignacio Doll at BBG this morning the Argie Peso has outperformed 148 USD FX pairs in the last 90 days, rallying 25% against the buck… gobstopping considering the best performance for the peso in last decade was negative 15%.
And in politics, among the abundace of news items we choose to consume in our daily lives, the top line event on Thursday was the presidential immunity case before the SCOTUS. By all accounts Trump will squeak by with a narrow victory and run for office essenially unfettered. However, if he loses he may lose everything and so too, may other politicians now in high office including those retired in Martha’s Vinyard and Texas. We shall soon see.
In the markets
It was an amazing day in stocks yesterday. Meta crumbled on Thursday after the bell. S &Ps fell sharply into a tight range overnight. As NY opened stocks sold off again. SPY and Qs fell 7 big handles but the tone was crisply bid. I was puttting offers well above in the pre market and getting filled even as the market was dumping. That however, didn’t last long. Buyers took immediate control, caught the market short, and by 10:30 the first of the twaps appeared. I doubt if there was another downtick for the rest of the session.
MSFT opened $30 lower, closed on the highs, reported well, and rallied another $20 in the post. Snap rallied 30% in the post. Google made all time highs in the post. There was easily a swing of more than a trillion dollars won and lost, high to low, bell to bell in just 4 stocks in 24 hours… not a trillion in the value of volume traded but the value of money that changed hands. If that sounds hyperbolic, it was. META opened lower and closed on the highs (Chart below). It’s likely whatever Zuckerberg lost yesterday on META, he recovered nicely on his portfolio after the bell.
This is an interesting chart of Meta, dropping into an old school rarity known as an island reversal. META's Q1 was bullish and prices gapped higher. But 75% of the rally occurred in milliseconds after the close. The rest, a mildly upward grinding range, recieved an orderly flow of AUM for a full quarter via twaps until yesterday. This morning prices gapped lower completing the form. If META accelerates lower from here ... billions of dollars will become trapped money. The stock is up today so the jury is still out.
Metals
Metals barely moved in New York yesterday, trading in in light volume and narrow ranges. Copper made new 2024 highs shortly after the Comex opened and closed shortly after the Comex opened, seriously. Changes in all three Comex metals were imperceptibly random. But mining stocks were another story.
This is Newmont Corp., following a stunning earnings report. I recently described it as being to the mining sector what the Metropolital Museum is to fine art. Frankly, I was the gamma was shocking but the rally per se was not. AISC for the majors was reported by analysts in March to be around $1250.
Miners are notoriously cheap because they are heavily shorted. Heavy short selling floods the auction with extra shares… And put collars and naked call selling all combine to depress inordinately low equity prices.
This is what happens when a miner earns a gross retuen of $1000/per toz.
An ordinary day in ETF AUM flows
My vibe,
I think it is time I think to separate AI from the NASDQ just as Jeff Vinick remade Magellan in 1995 and the CME created a futures a contract for tech in 1999. AI is too big, too nascent, and too important to be comingled with burger chains, old school blue chips and banks. It’s getting to be like keeping Tyranasaurs in the Bronx Zoo.
And I think there is an epidemic amount of bad gamma above the market in the entire mining sector. Btw NEM and Barrick and other majors mine a lot of copper, too.
Happy world book day!
Entirely my thoughts written for friends and sent to friends
Charts and data via 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.
Definitely a spt FX market. I don't think the A peso is a listed futures market, yet. It's been a very long since anyone used the Peso for anything other than local credit and consumption.
People like McCaul seem trapped in META