Market Update
The metals are mostly in a downtrend, but there are hints of a reversal in silver. The silver Open Interest is showing signs of the “wash and rinse” cycle ending – silver’s OI hasn’t been this low since mid-2020. Silver’s (single candle) reversal bar looks reasonably strong. Silver’s friend copper is more clearly breaking higher; copper’s OI is also near a 1-year low as well. And after getting chopped in half in 10 weeks, lumber too may be putting in a low. It is possible that the modest “commodity correction” has run its course.
The “not-so-transient” inflation thesis remains intact. My inflation gauge: the PPI (Producer Price Index), which has been around since 1913. This month it was up +1.79% m/m, or an annualized 21%, with y/y change: 19%. Last time we were here? 1974.
Note that behind the scenes, the Fed is engaging in reverse repos (36B) almost as fast as they print money. The Fed Giveth, and in the same moment, The Fed Taketh Away. I see this as them ending the printing campaign, while pretending not to do so. Who wants a market crash before everyone’s ready for it?
After dipping a bit, SPX is once again making new highs. This is probably helped by the slowly rising dollar (which suggests capital inflows from overseas), as well as a confirming rebound by crappy debt. Call it mild risk on.
Items that caught my eye this week:
Uncle Sam is arranging free transport for illegals coming across the border, presumably to avoid them piling up in camps in Texas.
by carl 
