September 2025 DDD

[ducati916]

Over the weekend, I had a chance to get to know Apollo Robbins. If you don’t recognize the name, Apollo came to public attention when he pickpocketed members of Jimmy Carter’s Secret Service detail.

The opening paragraphs from the profile that the New Yorker ran suggests what it is like to spend time with Apollo:

A few years ago, at a Las Vegas convention for magicians, Penn Jillette, of the act Penn and Teller, was introduced to a soft-spoken young man named Apollo Robbins, who has a reputation as a pickpocket of almost supernatural ability. Jillette, who ranks pickpockets, he says, “a few notches below hypnotists on the show-biz totem pole,” was holding court at a table of colleagues, and he asked Robbins for a demonstration, ready to be unimpressed. Robbins demurred, claiming that he felt uncomfortable working in front of other magicians. He pointed out that, since Jillette was wearing only shorts and a sports shirt, he wouldn’t have much to work with.

“Come on,” Jillette said. “Steal something from me.”

Again, Robbins begged off, but he offered to do a trick instead. He instructed Jillette to place a ring that he was wearing on a piece of paper and trace its outline with a pen. By now, a small crowd had gathered. Jillette removed his ring, put it down on the paper, unclipped a pen from his shirt, and leaned forward, preparing to draw. After a moment, he froze and looked up. His face was pale.

“****. You,” he said, and slumped into a chair.

Robbins held up a thin, cylindrical object: the cartridge from Jillette’s pen.

https://www.newyorker.com/magazine/2013/01/07/a-pickpockets-tale

It will be useful to have a phrase that captures Jillette’s reaction: a “****-you slump.” Time with Apollo makes it possible to experience a whole series of them.

The lasting effect is a heightened awareness that more things are possible than we can contemplate. In interactions with other people, there are always unknown unknowns. If we don’t allow for them, we are blind to them.

Pay Attention to the Base Rate​

There are many ways to convey the insight about probabilities known as Bayes' Law. One of the simplest is “rare things happen rarely.” A slightly more helpful one is “pay attention to the base rate,” but only if you know what the “base rate” means.

Suppose I were hiking in the Colorado mountains and happened to see an animal with a striking pattern of black and white stripes. Suppose that the size and shape convinces me that it was an equine, which means that it had to be a zebra, a horse, or an ass. To calculate the base rate for zebra encounters, think about all hikers in the Colorado mountains who encounter an equine. The base rate for zebra encounters is the fraction of equine encounters that involve a zebra. (Pedants will demand that I sprinkle the phrase “conditional on an equine encounter” over these sentences, but I’m not writing for them. They know what the base rate is.) The base rate for zebra encounters in the Rockies is an extremely small number.

Suppose that after my encounter, I conclude that the black and white pattern that I saw is hundreds of times more likely on a zebras than it is on a horse or an ass. What Bayes' law does is protect me from over-reacting to what I see and the calculation the data I see is much more likely if the animal is a zebra. The law is a mathematical expression that says that I should fold in the base rate along with the new data I see to get an accurate estimate of the probability that I saw a zebra. The evidence in this hypothetical case makes it more likely that it was a zebra, but the base rate makes it much more likely that it was a horse or an ass.

If you want to see the math, start with https://en.wikipedia.org/wiki/Bayes'_theorem.

But Get the Base Rate Right​

If you have a good estimate of the base rate, it can keep you from overreacting to a noisy bit of data. Zebra encounters are rare. But if your estimate of the base rate is wrong, it can lead you dangerously astray. It is particularly dangerous to assume that a base rate is zero.

This summer, in a part of the Colorado mountains that I’ve explored for my entire life, I had a surprising actual encounter with two large four-legged animals. I wondered at first if they could be mules. The larger one was too big to be an ass, but it did not look like a horse. In sixty years, I’ve never seen a moose in this area, but as I got a clearer view, I concluded that this was a female moose and a calf.

So yes, rare things happen rarely. But it is important to remain open to the possibility that we might encounter something rare, even something so rare that we’ve never seen it before.

If I had set my estimate of the base rate for moose encounters to zero, Bayes' law would have assured me that there was zero chance that the creatures before me were moose. This is base-rate blindness.

Base-rate blindness can be dangerous. A female moose can be very protective of a calf. I kept my distance.

Professors​

Professors work in a little reserve, our own little replica of Tanzania, where every equine truly is a zebra. But instead of zebras versus horses, the types we have to recognize are people who strive to maintain a reputation for honesty versus people who are willing to deceive. As we navigate our academic reserve, it is reasonable to assume that the base rate for intentional deception is very low. But this base rate can lead us astray if we apply it to life off the academic reserve.

Lots of people say that they confront scams all the time, and that the bad actors inevitably get the occasional win. But we academics, assure ourselves: “No doubt, the experience for the less sophisticated might be different, but we hardly ever encounter intentional deception. And if we did, it doesn’t put us at any risk because we’d see right through it.”

Lessons Learnt​

For someone who is confident about base rates, it is bracing to spend time with Apollo. There is no substitute for the visceral experience of serial ****-you-slumps. There is something to be said for encounters that leave the lingering thought, “I didn’t even consider the possibility that someone might do that.”

In the abstract, Apollo is transparent about what he does. In my vocabulary, he relies on the fact that the human brain can keep track of only a finite number of random variables. He creates and draws attention to enough of them to exhaust a mark’s mental capacity. The brain sets the base-rate to zero for all the others. At this point, the mark is base-rate-blind to those possibilities.

Closing Thought​

What if the hand-wringing about the shrinking demand for human knowledge workers is a distraction? What if the preposterous idea that our AI systems are going to lock us up in the basement and turn us into worker bees that serve them is misdirection? What if pleas for regulation by the leaders of organizations that want to profit from AI are intended to exhaust our ability to consider other possibilities?

Could AI be a con?

Usually, in previewing a Fed policy meeting, the big questions are around what the Federal Open Market Committee will do and say. For the meeting that begins four days from now, we don't even know for sure who will be in the room. Why it matters: The leadership of the world's most important central bank is in flux in ways never seen in the Fed's century-plus history. It probably won't affect the interest rate decision due out next week — almost certainly a quarter-point rate cut — but decisions made by courts and the U.S. Senate in the coming days could shape the institution far into the future. State of play: Senate Republicans are seeking to confirm White House economic adviser Stephen Miran as a Fed governor on Monday, which would allow him to join the FOMC meeting that begins Tuesday morning. Most people spend their first day in a new job getting their building badge and filling out HR forms; Miran is on track to spend his first day helping determine the cost of money for a $30 trillion economy. Meanwhile, the court battle over whether President Trump can fire governor Lisa Cook has been fast-tracked. A district court judge this week ruled that Cook can remain in place while her ultimate fate is litigated. The court hearing the Trump administration's emergency appeal asked for the parties to file responses by Sunday afternoon. That sets up a potential appeals court ruling by Tuesday. The big picture: Both situations could establish new precedents for the central bank's leadership. Miran is defying tradition by remaining a White House employee — going only on unpaid leave — while serving as a Fed governor. If he is confirmed Monday, it will have taken place with remarkable speed: just over five weeks between the announcement and Senate confirmation. Normally, that takes months. If the courts rebuff Cook's efforts to remain in place, it would illustrate that the president can remove Fed governors for cause even when that supposed cause hasn't been litigated. Between the lines: Historically, newly installed Fed officials do more listening than talking at their first few FOMC meetings, taking time to learn how the institution operates before taking any bold stands. The circumstances of Miran's appointment and his past writings suggest he might be a different type of governor. He has accused the Fed of groupthink, calling for more vibrant debates. It would be unsurprising, for example, if he dissented at next week's meeting, preferring to cut interest rates by more than the 0.25 percentage point that the policy committee is likely to deliver. It is also plausible that he could come in hot with public comments or media appearances after the Fed's customary blackout period ends Friday.

Data: U.S. Department of Labor via Federal Reserve Bank of St. Louis; Chart: Axios Visuals An outsized spike in jobless claims yesterday heightened fears of a swift labor market deterioration — even moving financial markets. It turns out the big jump, which took unemployment filings to a four-year high, was a result of attempted fraud in Texas. In short: It was fake. Why it matters: Minutes after the report, economists flagged that the overall spike in weekly claims was a result of an unusual surge in Texas — a quirk they attributed to holiday effects or the state's flood disaster claims program. Now the state's labor office, which reports the data to the national Labor Department, said it was a direct result of fraudulent attempts to collect unemployment benefits. The intrigue: "The increase in initial claims for unemployment insurance in the week ending September 6th is directly related to an increased volume of fraudulent claim attempts," a spokesperson for the Texas Workforce Commission said in a statement. "Since Labor Day, we've observed an uptick in identity (ID) fraud claim attempts aimed at exploiting the unemployment insurance system," the spokesperson added. By the numbers: The Department of Labor said yesterday that nationwide initial claims were 263,000, an increase of 27,000 — the most since October 2021. On an unadjusted basis, initial claims under state programs totaled 204,000, up 4% from the previous week. Texas accounted for 15% of that, with 32,000 claims — up by 15,000 in a single week. Of note: We asked the Labor Department whether Texas communicated that the fraud issue inflated its claims — and if so, why it was not flagged in the release. The agency did not respond by deadline. The bottom line: "The key message here is that the spike, as we had thought, doesn't tell us anything about the economy," J.P.Morgan economist Abiel Reinhart, who confirmed the issue from Texas officials, wrote in a note last night. "Ignoring this increase leaves claims running in the low 240k range, which is somewhat elevated from the same week in prior years, though not dramatically so."

Friday, September 12, 2025

The Russia-Ukraine war is back on the agenda as ICE Brent futures jumped up to $67 per barrel after Ukrainian drones attacked Russia’s Primorsk port, a key Baltic Sea loading terminal for its crude and product flows. With the Trump administration strengthening its pressure on the EU and others to implement secondary sanctions on India and China, geopolitics became the main bullish factor for prices.

IEA Sees Supply Surge on OPEC+ Boost. The International Energy Agency lifted its 2025 global demand growth forecast by 60,000 b/d to 740,000 b/d, however this was more than offset by its supply outlook rising from 2.5 million b/d to 2.7 million b/d after this week's 137,000 b/d hike from OPEC+.

India Taps Myanmar Rebels for Rare Earths. According to media reports, India's Ministry of Mines asked state-owned companies to obtain rare earths from Myanmar, taking samples from territory held by the separatist Kachin Independent Army after China introduced export curbs.

Iran Agrees to Resume Nuclear Inspections. Iran and the UN's nuclear agency IAEA confirmed they had agreed to resume monitoring at all nuclear sites across the country, including the ones attacked by Israel and the US in June, ahead of a September 27 deadline set out by the EU.

Russia to Start Sending Gas to Iran. Russia's gas giant Gazprom will start supplyingIran with natural gas within a 'few weeks’, according to Iranian authorities, first at a rate of 2 bcm per year but potentially increasing to 55 bcm per year, if Moscow and Tehran agree to build a new pipeline.

Sudan's Oil Industry Spirals Down the Drain. Sudan's only refinery, the 100,000 b/d Khartoum plant, was debilitated again after it was struck by a wave of drone strikes this week, probably triggering an aggravation of fuel shortages across the country as the refinery met 70% of its needs.

Saudi Aramco Keeps on Borrowing More. Saudi national oil company Saudi Aramco (TADAWUL:2222) raised $3 billion from a sale of Islamic bonds at a profit rate between 4.125% and 4.625%, using the raised funds for general corporate purposes, according to the offering's term sheet.

Phillips 66 Doesn't Give Up on US Refining. Despite closing its Los Angeles refinery this month, US downstream major Phillips66 (NYSESX) agreed to buy the remaining 50% stake in its WRB Refining joint venture with Cenovus Energy for $1.4 billion, taking full control of the Wood River, IL and Borger, TX refineries.

EU Mulls Its Options vis-a-vis Russian Major. France and Germany want to sanction Russia's largest private oil firm Lukoil and its Swiss trading arm Litasco as part of Brussels' 19th sanctions package against Russia, potentially disrupting refinery supply in Bulgaria, Romania and the Netherlands.

Japan Inks Controversial Alaska LNG Deal. Japan's largest power generator JERA has signed a 20-year term LNG supply agreement with US energy developer Glenferne for gas from the $44 billion Alaska LNG project, despite concerns about the project's exorbitant capital costs.

US Nudges Europe to Expedite Russian Gas Cut. US Energy Secretary Chris Wright said that the European Union could phase out Russian gas within the next 6 to 12 months, even if Hungary and Slovakia have so far rejected calls for a quicker regulated end to remaining flows.

Beijing Cracks Down on Teapots Tax Evasion. China's Ministry of Commerce introduced new rules for independent refiners across the country, forcing them to scrap paper tax Ledgers and report purchases, sales and inventories of products online, further jeopardizing runs that are already at historic lows of 47-48%.

Canada Wants to Fast-Track New LNG. Canada's new Carney government has proposed fast-tracking key LNG, nuclear and mining projects, singling out Phase 2 of the $32 billion LNG Canada project that could add an additional 14 mtpa of liquefaction capacity and become the second-largest LNG plant globally.

Lithium Prices Collapse on CATL Mine Restart. Chinese lithium carbonate futures have plunged to ¥70,000 per metric tonne ($9,900/mt) this week, marking a more than 5% weekly drop, on news that China's largest battery maker CATL could restart its Jianxiawo mine earlier than expected.

Activist Investors Haunt Japanese Power Generators. Activist investor Elliott Management stated that Japan's top nuclear power operator Kansai Electric (TYO:9503) could become a better long-term investment if it starts to shed non-core assets, with the US firm amassing a 4% to 5% stake in it.

Here are the latest earnings stats from the S&P 500

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*Click the image to enlarge it The only S&P 500 earnings reaction on Thursday came from the $44B grocery store chain, Kroger $KR, which rallied 0.30%, but had a slightly negative reaction score after posting mixed headline results. They reported revenues of $33.94B, versus the expected $34.10B, and earnings per share of $1.04, versus the expected $0.99. It was a much quieter day on the earnings front after Wednesday's historic price action. Now let's dive into the fundamentals and technicals

KR has been rewarded for 11 of its last 15 earnings reports

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Kroger had a muted earnings reaction after this earnings report, and here's what happened:

Sales increased by 3.4% year-over-year, driven by 16% growth in e-commerce over the same period. They're aggressively returning capital to shareholders, growing the quarterly dividend by 9% to $0.35 per share. Additionally, they have $2.5B authorized to repurchase shares. In addition to the great quarter, the management team boosted its forward sales and operating profit guidance.

This was another solid report from one of the largest grocers in the United States. The company has a consistent track record of delivering value to shareholders, which shows in the way Mr. Market consistently rewards the stock post-earnings. Thursday's report and market reaction were the latest examples of Kroger's strong fundamentals. As you can see on the chart, the price is stuck in no-man's land, wedged between two key Fibonacci extension levels. This is a textbook range-bound stock. Since this is occurring within the context of a long-term uptrend, we want to bet on the buyers eventually regaining control and resuming the primary trend. Over the short-term, we expect KR to continue churning sideways between 64 and 73.

• Disbelief among investors persists.
• Stock market breadth is expanding.
• This is the setup we want to see.

You'd think with stocks ripping to fresh highs, the mood out there would be euphoric. Confetti. Champagne. Victory laps.

Instead, it feels like the opposite.

Just yesterday, the S&P 500 closed at a new all-time high. So did the Dow Jones Industrial Average. So did the Nasdaq-100. The NYSE Composite too.

And globally? The All Country World Index also set a new record close.

The trend in stock prices is undeniable: up.

Yet sentiment? It's still weighed down by pessimism.

Half of all individual investors polled by the American Association of Individual Investors (AAII) say they're bearish on the next six months.

Half!

That's now six straight weeks where bears have outnumbered bulls - even as the major indexes march higher week after week.

New Highs Are Characteristic of Uptrends​

After not making any new all-time highs until very recently in 2025, the Dow has been on a tear over the past few weeks, closing above 46,000 for the first time in history:



The Dow Jones Industrial Average now joins the S&P 500, the Nasdaq-100, and many stock market indexes in new all-time high territory.

That's the type of thing you normally see in healthy market environments.

What you also typically see when good times are here to stay is disbelief.

Look no further than the latest AAII data, where you can see half the respondents are somehow bearish about the stock market over the next six months.

Here's the screenshot directly from the AAII website:



What are these folks so scared about?

It's fascinating to see how much pessimism is out there among individual investors, considering just how well stocks are doing.

Here's a zoomed-in look at the historical data of this poll, showing the most bearish readings since early May:



Keep in mind that those readings throughout April and into early May were some of the most bearish readings in history, and this data goes back to the 1980s.

You saw the epic ripper in stocks since then. But individual investors have only gotten more bearish.

That's called disbelief.

Breadth Expansion​

When true market tops form, the cracks usually show up beneath the surface first.

Breadth weakens. Fewer stocks make new highs. Fewer stocks hold their uptrends. The indexes might still grind higher for a bit, but under the hood, participation is already deteriorating.

That's not what we're seeing today. It's actually the opposite.

Right now, the percentage of NYSE stocks trading above their 200-day moving average is the highest it's been all year.

That's expanding breadth, not contracting.

And it's not just a U.S. story. Globally, the All Country World Index ex-U.S. (ACWX) just closed at fresh all-time highs.

This isn't the type of action you see at major tops. It's exactly what you expect to see in a strong, healthy bull market:



When you weigh all the evidence, the question becomes simple: Where should we focus our time and capital?

Should we be hunting for shorts and scrambling for "safe" alternatives, or leaning into strength and finding the best stocks to own?

The data makes the choice clear.

Prices are trending higher. Breadth is expanding. Pessimism is still everywhere. That's fuel for further upside, not evidence of a top.

The trade hasn't changed: Stocks are going up, and the crowd is still fighting it.

That's exactly the setup we want.

And until the evidence says otherwise, I'm sticking with it.

Stay sharp,

A Different Kind of AI Infrastructure Stock​

Chart of the Day for September 12, 2025

Valmont Industries (VMI) is showing strong technical momentum, hitting new all-time highs and maintaining a 100% “Buy” Barchart opinion. VMI trades above key moving averages, with a Trend Seeker “Buy” signal intact and a 41% gain over the past year. Fundamentals remain solid with consistent earnings and revenue growth. VMI is volatile and speculative. Strict risk management and stop-loss strategies are recommended for investors considering this stock.

Today’s Featured Stock​

Valued at $7.6 billion, Valmont Industries (VMI) is primarily engaged in the production of fabricated metal products, metal and concrete pole and tower structures, and mechanized irrigation systems in the United States and abroad.

What I’m Watching​

I found today’s Chart of the Day by using Barchart’s powerful screening functions to sort for stocks with the highest technical buy signals; superior current momentum in both strength and direction; and a Trend Seeker “buy” signal. I then used Barchart’s Flipcharts feature to review the charts for consistent price appreciation. VMI checks those boxes. Since the Trend Seeker signaled a buy on July 22, the stock gained 9.37%.

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Barchart Technical Indicators for Valmont Industries​

Editor’s Note: The technical indicators below are updated live during the session every 20 minutes and can therefore change each day as the market fluctuates. The indicator numbers shown below therefore may not match what you see live on the Barchart.com website when you read this report. These technical indicators form the Barchart Opinion on a particular stock.

Valmont hit a new all-time high of $388.10 in intraday trading on Sept. 11. Valmont has a Weighted Alpha of +40.41. VMI has an 100% “Buy” opinion from Barchart. The stock gained 41.40% over the past year. VMI has its Trend Seeker “Buy” signal intact. Valmont is trading above its 20-, 50-, and 100-day moving averages. The stock made 2 new highs and gained 1.5% in the last month. Relative Strength Index (RSI) is at 59.40%. There’s a technical support level around $378.23.

Don’t Forget the Fundamentals​

$7.6 billion market capitalization. 22.02x trailing price-earnings ratio. 0.71% dividend yield. Revenue is expected to grow 0.65% this year and another 5.11% next year. Earnings are projected to increase 9.37% this year and an additional 11.99% next year.

Analyst and Investor Sentiment on Valmont Industries​

I don’t buy stocks because everyone else is buying, but I do realize that if major firms and investors are dumping stock, it’s hard to make money swimming against the tide. It looks like Wall Street analysts are split on Valmont. The Wall Street analysts tracked by Barchart have issued 3 “Strong Buy” and 2 “Hold” opinions on the stock. Their price targets are between $335-$400. Value Line gives the stock its “Above Average” rating with a price target of $436. CFRA’s MarketScope Advisor rates it a “Buy.” Morningstar thinks the stock is fairly valued. 901 investors following the stock on Motley Fool think the stock will beat the market while 73 think it won’t. 4,960 investors monitor the stock on Seeking Alpha, which rates the stock a “Hold.”

The Bottom Line on Valmont Industries​

Valmont has shown very consistent increases in both revenue and earnings for a very long time and has not disappointed long-term investors. The industrial products it makes will be used to implement the electrical grid infrastructure that will be needed to feed the energy needs of AI data centers. I caution that VMI is volatile and even speculative in the current environment, which means investors should use strict risk management and stop-loss strategies.

This week, it became impossible to ignore the changing face of the Bitcoin mining industry. In just one announcement, from a company that’s never even touched Bitcoin before, shares of the largest miners went ballistic. Our IREN Ltd $IREN position has already more than doubled, Applied Digital $APLD is up +20% in two days, Cipher Mining $CIFR has surged +45%, Bitfarms $BITF is up +40%, and Riot Platforms $RIOT is up +20%. So what was the catalyst? Neibus Limited $NBIS signed a $17.4 billion, five-year GPU supply agreement with Microsoft. Big tech companies like Microsoft and OpenAI need immense amounts of computing power and electricity. Deals like this show just how valuable that capacity is, and the smart Bitcoin miners have been positioning for this shift. Because let’s be honest: Bitcoin mining is a brutal business. Margins get squeezed, profitability is volatile, and sustaining long-term returns is tough. AI, on the other hand, is a different story. Margins are orders of magnitude higher. That’s why I went through every Bitcoin miner’s filings and aggregated management’s guidance to size up the magnitude of this repositioning. The takeaway? By next year, revenue from High Power Computing (AI) will start to climb meaningfully. By 2027, for many, it will rival, or even surpass, their Bitcoin mining income.

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But not all miners are created equal. Some are pivoting aggressively into AI. Others are sticking with the old playbook: mine Bitcoin, hoard Bitcoin, repeat. To separate winners from laggards, I mapped out each company’s projected energy allocation, how many megawatts will go toward Bitcoin mining versus high-power AI compute, and overlaid it with the stock's YTD returns. The results were clear: the market is rewarding those leaning hardest into AI.

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That’s why our IREN, APLD, and CIFR trades are outperforming, while MARA continues to lag. And there’s another dynamic at play. The market isn’t just rewarding miners pivoting to AI, it’s punishing those acting like treasury companies. Take Marathon Holdings $MARA. It holds 52,477 BTC, the second-largest corporate stash after MicroStrategy. But investor appetite for these “Bitcoin treasury” models is fading. The premium investors once paid is compressing, especially as better vehicles like the iShares Bitcoin ETF $IBIT gain traction. Contrast that with IREN, which follows a strict no-HODL policy, selling all mined Bitcoin for cash. They aren’t weighed down by this repricing, and their stock reflects it. And zooming out, I think this space still has legs. The Valkyrie Bitcoin Miners ETF $WGMI, a solid proxy for the sector, is only just breaking out. It’s far from overextended.

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We’re already positioned here.

jog on
duc

 

[peter2]

Thanks, @ducati916 for the sector stock lists that you occasionally post. Great for creating and monitoring various sector watchlists.

 

[ducati916]

• Gold starts the cycle - it's the early signal of liquidity and inflation shifts, showing us what's coming before the economy reacts.

• Copper confirms, lithium bridges, oil lags - copper validates growth, lithium connects cyclical reflation with structural demand (EVs, batteries, renewables), and oil is always the closer.
• Trading is connecting the friends in your head - seeing how global signals fit together turns market noise into clarity, just like finding rhythm in Nirvana's Lithium.

One of the first songs I learned on guitar was "Lithium" by Nirvana. My father was a great guitar player, and he would always give me songs that I liked and were easy to learn.

The opening line has always stuck with me: "I'm so happy 'cause today I found my friends, they're in my head."

That's exactly what being a global futures trader feels like.

My "friends" are the signals, correlations, and cycles playing out across asset classes.

I'll see something moving over in China, maybe in their stock market or agricultural market, and instantly my mind connects it to copper.

Then another "friend" inside my head fills in the why - liquidity shifts, global demand, or policy changes.

It might look chaotic from the outside, but for me, those "friends" fit together.

And the framework that keeps me grounded in all of it is the commodity cycle.

The Cycle: Meet My Friends​

Take a look at the chart:



Gold starts the move. Gold is always the first one to show up. It's the friend that doesn't wait for the economy to confirm anything.

It anticipates liquidity shifts, inflation pressures, and policy pivots. When gold breaks out, it's the signal that something bigger is coming.

Copper leads oil. Copper is the confirmation trade. It's the "PhD in economics" metal, tied to construction, manufacturing, and infrastructure.

When copper rips, it tells you the real economy is catching up with what gold was signaling.

Oil moves last. Oil is reactive. It responds to liquidity, supply shocks, and lagging demand.

By the time oil makes its move, the others have already set the stage. It's the closer, not the initiator.

So where does lithium fit?

Between Copper and Oil​

Lithium has become one of the most important "friends in my head."

This market surged more than 440% from the pandemic lows in March 2020.

After taking time to rest and build a base, the chart is now breaking out to a fresh 52-week high.

This kind of setup usually signals the start of another big move higher:



It doesn't sniff out demand quite as early as copper, but it comes before oil in the cycle.

Lithium is the bridge commodity - connecting cyclical reflation with structural demand.

EVs, battery storage, data centers, renewable energy - these aren't optional trends. They're structural. Lithium demand doesn't go away because the economy slows for a quarter.

When capital rotates back into lithium, it tells us that the forward-looking, technology-driven demand story is aligning with the cyclical reflation story that gold and copper already flagged.

That's why lithium matters right now. It sits right between copper and oil, and it amplifies the cycle by anchoring it to the future.

From Chaos to Clarity​

Being a trader is a lot like playing "Lithium" for the first time. You start with simple chords, some noise, and it feels rough. But then it locks into rhythm. Chaos turns into something that makes sense.

That's what the commodity cycle does for me. Instead of staring at dozens of disconnected signals, I see the sequence:

• Gold starts...
• Copper confirms...
• Lithium bridges...
• Oil follows.

Those are my "friends in my head."

Embracing the Noise​

The brilliance of Cobain was making the messy sound honest. That's what trading is about too.

The market never moves in a straight line, but if you listen long enough, you hear the pattern underneath the noise.

Gold tells us what's coming. Copper confirms it. Lithium bridges the future. Oil, as always, moves last.

That's the cycle. That's the model.

And once you find those "friends," you realize they're always in your head - helping you put the pieces together.

Save the bees,

There’s a scene in My Dinner with Andre that feels strangely relevant to trading today. Andre is sitting at the table saying: “We’re all bored now. But has it ever occurred to you that the process that creates this boredom may be a form of unconscious brainwashing? Somebody who’s bored is asleep. Somebody who’s asleep will not say no.” It’s haunting, because he’s not just talking about boredom. He’s talking about conditioning — the way the world lulls us into passivity, makes us accept things without questioning them, turns us into sleepwalkers. That is exactly what happens in markets. Consensus takes over. People get comfortable. Investors stop questioning, and they start assuming that what has always been true will always remain true. They become bored, asleep — and asleep people don’t fight back. As traders, we don’t get that option. Fighting Your Own Instincts When you fight, everything in your body tells you to do the wrong thing. If a punch comes your way, your instinct is to step back. That feels safe. But in reality, stepping back gives the punch more room to gain speed and hit harder. The right move — the counterintuitive move — is to step into the punch. By closing distance, you absorb less of the force. Trading is the same. Your instincts scream at you to chase highs or sell when you’re scared. The crowd pulls you into consensus thinking. But survival means doing the opposite: leaning into discomfort, questioning what everyone else believes, and recognizing that your own brain is often the enemy. We are not robots. We have choices. And those choices matter most when they go against what feels easy. The World Is Not What We Think This brings me to gold. Ten years ago, if you had said that foreign central banks would someday hold more gold in their reserves than U.S. Treasuries, you would have been laughed out of the room. It would have sounded paranoid, almost conspiratorial. Everyone knew the U.S. Treasury market was the deepest, safest pool of capital in the world. Gold was old-fashioned — a relic. And yet, here we are. The Crescat Capital chart shows it clearly: for the first time since 1996, gold holdings as a share of global central bank reserves have overtaken Treasuries. That’s not a theory, not a prediction — it’s happening right now.

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At the same time, Reuters just ran the headline: “Gold’s rise in central bank reserves appears unstoppable.” This isn’t some fringe story. It’s front-page news. What once sounded crazy is now reality. The Andre Analogy Andre, in that scene, talks about people building their own prisons. He describes New York as a “concentration camp built by the inmates themselves, where the inmates are also the guards.” People, he said, become so attached to what they’ve built — their routines, their assumptions, their consensus — that they can’t even see the walls around them. That’s the danger in markets. Investors build their own prisons out of narratives like: “The dollar will always dominate.” “U.S. Treasuries are the ultimate safe haven.” “Gold is outdated.” Those assumptions become the bars. And when the world shifts — when central banks dump Treasuries for gold — most people can’t escape. They’re asleep, and asleep people don’t say no. Question Everything, Keep It Simple Trading in this kind of world is maddening because it requires holding two contradictory truths at the same time: You must question everything. The world is not what you think it is. The market will always move in ways that surprise the majority. You must keep it simple. If you overcomplicate things, you’ll paralyze yourself. Focus on price, flows, positioning — the signals that matter. That balance is hard. It’s like fighting. Your brain is screaming to step back, but the right move is to step in. You have to resist instincts, reject consensus, and simplify. That’s the art. Where We Stand The world is changing in ways most investors still don’t believe. Central banks are quietly rewriting their playbooks, replacing Treasuries with gold. That tells us something profound: the structure of global reserves is shifting under our feet. It would have sounded crazy a decade ago. Now it’s fact. And if you’re still asleep, you’ll miss it. Andre’s words echo here: “Escape before it’s too late.” As traders, that doesn’t mean fleeing the system. It means refusing to be brainwashed by it. It means staying awake when everyone else is bored and asleep. It means learning to love the discomfort of stepping into the punch. Because that’s where survival — and opportunity — lives.

In a surprising turn of events, World Liberty Financial also blocked Justin Sun, their largest known investor, from accessing his tokens. While Sun holds approximately 3 billion WLFI tokens in total, with 595 million unlockeda when secondary trading began, the team froze his wallet after he transferred around 55 million tokens (priced at roughly $9 million at the time). They did this using a function in the WLFI smart contract that allows them to blocklist specific wallet addresses.

a.
As World Liberty Financial has opened up WLFI for secondary trading, they have imposed a gradual unlocking schedule on early holders, aimed at preventing them from suddenly selling all their tokens at once and crashing the price. This is common practice for projects that have presold or allocated tokens to insiders and early-stage investors.
An address controlled by Sun isBlacklisted by the WLFI smart contract
Such functions don’t normally exist in more decentralized cryptocurrencies like bitcoin or ether, but are more common in tokens issued by centralized entities who routinely freeze tokens in sanctioned wallets or that are deemed to be associated with thefts or other illicit activity. Sun defended his actions on September 4, tweeting that he had only “carried out a few general exchange deposit tests” and that “no buying or selling was involved”. He insisted these transfers “could not possibly have any impact on the market” — apparently responding to speculation that he had been selling tokens and thus contributing to WLFI’s price decline, though it remains unclear whether this accusation came from the World Liberty team themselves or from public speculation.6


Full:https://www.citationneeded.news/issue-92/




Despite the optimism embedded in the name, a stablecoin can collapse—and has. TerraUSD (often abbreviated as UST) was a prominent one until May 2022, when it crashed and caused a chain reaction that took down two other significant market players and eventually contributed to the collapse of the crypto exchange FTX. Terra was rebranded and still trades on the Terra Classic blockchain, under the symbol USTC, but is no longer pegged to the dollar or considered a stablecoin.

That doesn’t necessarily mean that all stablecoins are destined for the same fate. Terra was inherently unstable, research explains, because of what was being used to stabilize the value.

There are three main types of stablecoins, two of which are collateralized—meaning they use reserves to maintain a stable value relative to a pegged asset such as the US dollar. The first type is backed by reserves denominated in fiat currency. Think money market funds and Treasury bonds. The second type is backed, either fully or in part, by other cryptocurrencies.


There’s another problem beyond risk and runs, argues Booth’s Eric Budish. According to his research, the blockchain technology as laid out by Nakamoto, upon which cryptocurrencies such as bitcoin and now stablecoins are built, is fundamentally flawed. As the industry grows, it will be impossibly expensive to keep it secure and fraud free. Even if a stablecoin is able to maintain its peg, bad actors could delete transactions from the record and steal money.

Nakamoto’s blockchain can be thought of as two separate developments, Budish explains. The first is the blockchain data structure, and the second is the trust model, which he sees as far more innovative. The idea that people trust the blockchain, despite the fact that there’s no centralized, trusted party keeping order, is widely considered a breakthrough in both computer science and economics. For centuries, the accuracy of business ledgers has been supported by what Budish considers “traditional sources” of trust—law, reputations, relationships, and collateral. With blockchain technology, the trust is based on distributed, anonymous actors. This model is known in computer science as permissionless consensus.


The more people use cryptocurrencies, the more computer power is required to keep the system running free from fraud. At some point, the costs of this computation will exceed the benefits. Budish estimates—even in his most conservative scenario—that the cost to secure a permissionless-consensus blockchain against a $10 billion attack would be roughly $500 billion per year. With less conservative assumptions, the cost to secure the same blockchain rises to roughly $45 trillion.

This makes it unlikely that the decentralized trust models as currently designed can play a large role in traditional finance. However well cryptocurrencies are perceived to have worked so far by those speculating and even using them for black-market activity, Budish’s theoretical research suggests that the clock is ticking as they grow. The upshot is “that—at least in its pure form, without any implicit protection from rule of law—Nakamoto’s novel form of trust faces serious economic limits,” Budish writes.


Full:https://www.chicagobooth.edu/review/in-stablecoins-we-trust

• While seemingly unrelated, Small Caps ($IWM) and Ethereum ($ETH)have generally moved in tandem since the pandemic. Both are currently pressed against their 2021 peaks, on the cusp of all-time highs.
  
  
• Their “safer” counterparts, Large Caps and Bitcoin, kicked off the bull market over a year ago by reclaiming their 2021 peaks in 2023 and 2024, respectively.
  
  
• As the market cycle matures, it's natural to see rotation down the risk spectrum, and we should see capital flow toward higher beta alternatives like Small Caps, Ethereum, and even Silver.
  

The Takeaway: Large Caps and Bitcoin started the party more than a year ago, but their higher-beta alternatives have finally arrived. Small Caps and Ethereum are knocking at the door and ready to join the party.










So many of the charts are pro-crypto.

I would advise reading that long article on stablecoins.

For me, the whole crypto thing is a bag of shite. I wouldn't 'invest' in it ever. Trading it, no issues, it's just another ticker.

But I wouldn't 'invest' in cash either. Absolute shite.


So the FOMC on Wednesday. Hmmm.

A 25bps is a given (as far as the market is concerned) and that should always ring alarm bells. This rate cut is priced in. So is this a classic case of buy the rumour, the last 6mths and sell the news?

I think so.

Unless Powell does 50bps. Then we may continue higher. It is highly unlikely that Powell does 50bps because:

(i) he hates the idea of cutting at all, he wants to keep powder dry for when the recession hits; and
(ii) he likely hates Trump and would not go out of his way to help him; and
(iii) on what basis could he justify 50bps and would that spook the market anyway?

So it's very probable 25bps and that is just so boring. So boring in fact that we sell-off hard.


So this 'bull' market is highly speculative and is definitely not supported by the fundamentals. The pure technical chaps, JC and his crew are of the view that when the market breaks, they will reverse and become bears. The problem is distinguishing a market break as a pullback as against the end of the bull. April will hurt many when the end arrives as they will look at that 'V' recovery and jump back in.

Having said all of that, tops are pretty tough to time. Bottoms are relatively easy.

The key will be employment. A break in employment = recession = market break




The 'real' economy, something that has been smoothed over by a 'bull market' meme is breaking and breaking fast now.

I remember a few months ago that I posted a video from Tom Lee, the analyst and he commented on the confidence surveys. Essentially what he said was that they were important indicators of market health and direction. I remember it clearly because it surprised me: I had up to that point simply ignored 'sentiment'.


Sentiment:





There is the correlation.


Look at the divergence. I love divergences. They are great, great trading signals.

As already stated, this bull market is technical. It has no fundamental underpinning. It is grossly overvalued. Hideous. We are in September and October. Terrible months historically for markets. Historically they were bad because the Banks would reduce speculative loans (leverage) into stocks due to loans extended to farmers for harvest. Now that no longer occurs, but markets have an eerie way of playing the same songs.

The real economy is in the shitter. Absolutely. The numbers are turning.



jog on
duc