Tuesday, April 7, 2026 
Season I, Episode II is live. Before viewing, be sure to turn up the volume.
My mission is timeless. Within it’s timelessness there are cross sections of time.
This cross section takes us back to the 70s. Art is trading and trading is art. My gold trade in the 70s is one of my finest works of art.
Volumes dropped to their lowest levels of the week today on the NYSE and the NASDAQ as traders hit the eject button earlier than normal ahead of the three day weekend in the US.
The S&P futures closed near their highs of the day as well as at the 50% retracement level from the highs of the week. The pit traded S&P showed a pick up in volume that was not seen in the e-mini contract. S&P Pit Contract - Daily Chart Gold Futures - 15 Minute
Gold traded within yesterday’s range and closed near the highs (but just below the $1,000 barrier). Traders continue to ponder the move in gold — whether it’s a fake out or breakout.
I spoke to several trading desks today. Not surprisingly, our conversations quickly veered to gold. From what I gathered, because of the sudden interest — be it a squeeze or not — traders are buying gold now and planning to ask questions later — a strategy that has a tendency to bite back hard if things don’t work out as planned.
Fed fund futures are pricing a 1.5% chance (extremely unlikely) of a fed funds rate rise by the December FOMC meeting, which could be the catalyst behind the sudden spike in gold prices. The longer the fed waits to raise rates, the larger the inflation problem will be.
For the time being, I reside in the deflation (versus inflation) camp. If gold does break above $1,000 and holds the line, I’ll buy gold futures faster than I can blink. My deflationary thesis is fundamental. A breakout in gold would be technical. When in doubt, I typically run with the technicals. Further, being long gold against my short equity/short commodity exposure will provide a decent hedge, which is not to imply that I am a fan of running a hedged portfolio.
Markets are closed in the states Monday, so I am jetting off to China in the next couple of hours to catch the Monday session in Shanghai. If I see anything worth pointing out, you’ll be the first to know.
And that’s a rap.
You never give me your money
You only give me your funny paper
And in the middle of negotiations
You break down
-The Beatles
The S&P traded around the midpoint of yesterday’s range the majority of the session. The indices bolted higher in the last hour and the S&P futures closed above yesterday’s high and above the 1,000 mark. The high volume ramp in equities in the last hour was not confirmed by the credit market as credit spreads were generally flat.
S&P e-mini 15 minute
Short Squeeze or Ominous Sign?
Gold remains the talk of the town. Why is gold decoupling from the correlations in observance prior to yesterday? I find it next to impossible (though all things are possible) that gold is breaking out in anticipation of inflation. There are no signs of inflation as far as I can see. To the contrary, all signs point to deflation. If the inflation trade is on, why aren’t interest rates spiking?
Is the move in gold a flight to safety in anticipation of military action somewhere? If so, why is oil not spiking?
Does someone know something the rest of us don’t?
Technically speaking, gold will not breakout with any conviction until it clears the $1,000 barrier and holds the line. Until then, we may be seeing a good old fashioned short squeeze. Hong Kong is pulling all it’s physical gold holdings from depositories in London. Are reserves sufficient enough to meet physical delivery?
Astrology or Numerology?
The number 9 has been a focus of these pages for some time. In what is termed a new moon, the sun and the moon will come together (The Beatles, Abbey Road, 1969) on September 18th, 2009. 6×3=18 and 6+3=9, which brings me back to 9-9-09.
Season I Episode II
On 9-9-09 at 9:09:09 Episode II of The Adventures of Mr. Volatility will be released. In Episode II, we are going to take a ride on The Errol Flynn circa 1976. Gold made a massive move higher in the late 70’s. I want to tell you a story about it.
Stay tuned.
Come Together
S&P 500 Intraday Range S&P 500 - Daily Treasury Futures Gold
The S&P hugged the lows of yesterday for the majority of the day in a mostly quiet session.
Quiet as it seemed, there was a pick up in volume in both the S&P e-mini contract (machines) and the pit traded contract.
Poker
When I left off on my poker analogy, the market called my re-raise after the flop. I stated that I would call the market, no matter what the turn card. The turn card was dealt yesterday and the break lower showed a pick up in volume. Along with the pick up in equity volume, the credit market confirmed what it had been hinting at all of August. Credit spreads widened across the board, most notably in the financial complex.
Waiting for the turn card was the tough part. I have now bet the size of the pot and I await the market’s reaction. Based on today’s action, I’d say the market has not reacted much. It is still staring down at his cards. So far the only tell is the pick up in volume in the S&P futures contracts today.
I stuck to my plan when the turn card was dealt by buying puts in a range of asset classes and calls in 10 year Treasuries. From a chart perspective I see potential resistance in the 10 year above the 120 mark.
Gold
Gold traded strong today and was up the most it’s been since March. Depending on where the trendline is drawn, some may declare it an official breakout. Some time back, I sold my gold positions. Last year, when the flight to safety trade gripped Wall Street, gold traded much lower–as low as $680 per oz.
In light of that, I am going to see if gold can surpass the $1,000 mark–and the subsequent reaction–before I am tempted back into gold futures. For now, the physical gold that I hold in safe haven countries around the globe will suffice.
Slowly but surely, cracks in the foundation of the market are appearing and confirming themselves. If volatility is to make a sudden move higher, I am positioned well.
As I wait for the market to react to my bet, I will seek out the important tells and communicate them as best I can.
That’s a Rap.
Peace. Out.
The Volatility Index (VIX) has continued its perilous plunge from the heights of its October summit. Why hasn’t it caught an outcropping yet? Perhaps it is because the Index is not reflecting the underlying stress in the market. The core reasons for this are tri-fold:
First, quant funds are selling index volatility and buying volatility in individual names, which has a masking effect.
Second, the season of quazi-investors reaching for returns by selling huge call positions is upon us.
Third, The FED and it’s media have been so successful in augmenting bank sentiment that they have procured a huge boost in their common equities. This has allowed billions upon billions of dollars to be raised in common stocks of banks. Consequently, the equity offerings that have been raised of late will need to be further diluted. The stress tests were rigged, and the adverse case scenarios were far too optimistic.
Where does this all lead? For my money, I continue to own size in Ten Year calls. I am also finding safe footing in select miners and precious metal names.
The crash of 2009 is mounting, but so too is my strategy. The Ten Year goes far, far higher. In spite of all government efforts and their media machine, I veer not from my position. There is a wild outlier push coming in Treasuries, and rates will go below 2%. The FED has skillfully driven the market higher, but their trade will unwind; and as it does, the (VIX) and Treasuries will soar. Very few will be prepared. Peak earnings require a slow, methodical trek—and patience is one of my gifts.
When the climb of this year is over and my gains reach their crest—multiplying exponentially—my musings will see a larger audience. It’s a little known fact of the market that one’s net worth equals one’s net voice. Do you hear me yet?
Peace
The VIX
It is my vision that, through meaningful work and collaboration, I can better myself.
Using my inspirations as a guide, I will produce things of importance, and open doors for those that believe in themselves, and build an immense store of energy.
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