🇺🇸 Hurricane Melissa Predictions

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🇺🇸 More bulls than bears again in the latest AAII spread.

Unfortunate...

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🇺🇸 American banks are still sitting on $395 billion in unrealized losses.

Such are the dividends of 14 years of zero bound interest rates. Well, sort of. The dividends come when the medium-sized banks fail and get devoured, as we saw a bit of a few years back.

No worries. They changed the rules so they're just always worth face value. So that fixes that, right?

Right?

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🇺🇸 The Qs breaking out against the Spoos again...

Nasdaq 100 ($QQQ) vs. S&P 500 ($SPY) on the monthly.

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💎 Gold experienced record outflows this week as 22.6 tonnes in net asset value fled.

After hitting all-time highs at almost $4,382/ounce on Monday, there was a 5% loss on Tuesday as traders took profits, followed by the Fed demurring about future cuts & then the announcement of an economic truce between Trump & Xi.

As a result, around $12.7 billion evaporated from gold funds. As of this posting, the spot market is trading at $4,003 and futures are lower at $3,997.

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🔗 Aluminum is up 11.6% in almost 2 months and now fetches $2,875 per tonne—a level unseen since mid-2022. The price has broken out of horizontal resistance and is reaching the top of its channel.

This isn't incidental. Inventories in London are historically low, and there are disruptions in the bauxite ore & alumina powder supplies, particularly out of Australia & Guinea.

Simultaneously, green energy, emerging market development, and European remilitarization are significantly adding to demand. The elevated price of real energy is also limiting production (especially for Europe smelters, as you'd expect).

In America, 50% tariffs & the sanctions forcing Russian supply to China are not helping matters. In lieu of a recession or policy changes from one of these governments, upward price pressures may endure well into next year.

🕯 CHART WATCH 🕯

🇺🇸 This is a definitionally "unhealthy bull market." With each new all-time high, the number of stocks within the S&P 500 that are above their 50-day moving average declines.

80% were above their 50DMAs at the start of July. We're down to 40%. The number of stocks above their 200-day averages shows stagnant long-term breadth over the same period.

What you generally want to see is the opposite...

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💰 Bitcoin's Spot Trading Volume (subdivided by exchange)

Binance still leads by a mile, but Gate.io has opened up a lot of share to move into second.

Generally speaking, it's positive to see spot volume experiencing this upswing.

🔶 CHART WATCH 🪙

🇺🇸 The empire strikes back...

The U.S. Dollar Index ($DX1!) is up 2.25% this month as it bounced on its 14-year support. This will disappoint many antagonists worldwide.

Such is life. As the Euro (which is 57.6% of the $DXY index) looks primed to take a tumble against the Dollar, this move has the potential to become a trend.

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🇷🇺🇨🇳 Monthly Exports to Russia by Country

If not for China, this lunacy about collapsing Russia might've actually worked...

I have no earthly idea why Western leaders believed China would do anything else. They do understand China can hear them saying "Russia first, then isolated China," right?

📈 CHART WATCH 📈

🇺🇸 The Goldman Sachs Housing Affordability Index remains quite low...

Why? Prices are up. Wages are stuck. Mortgage rates are elevated (except for most of the people holding them, who are therefore disinclined to move).

Thanks to insane zoning laws and even more insane housing regulation, we have a housing shortage. This is exacerbated by rising construction costs. And illegal immigration is aggravating the problem with limited supply and stagnant wages.

Something has to give.

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🇺🇸 Mortgage Payments vs. Rent as a % of Household Income (1970-2025)

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🇺🇸 Which states pay the most for electricity?

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🇺🇸 The S&P 500 Equal Weight ETF ($RSP) has essentially gone nowhere over the past year.

All the action is occurring in the megacaps & the AI bubble.

I'm really trying to drive this home: breadth is not going well.

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🇺🇸 These are the only counties that voted more Democratic in 2024 than in 2020, shaded by percent increase.

Can I just say Colorado and Utah are two of the sketchiest states in the Union?

🇺🇸 CHART WATCH 🇺🇸

🇺🇸 Berkshire Hathaway ($BRK.B) has been raising cash for three years.

12 straight quarters of net sales.

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🇺🇸 Thank God they saved all those people by moving them from mental hospitals to prisons.

We could've just reformed the hospitals, but I guess that's too big an ask for Boomers & their parents.

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🇮🇱💥🇱🇧 The prediction market for how long Israel's aggression against Lebanon is going to last...

70% of the crowd thinks it continues through Wednesday. There aren't any further days yet, so we might interpret this as Wednesday through indefinitely.

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💥🇮🇱💥 How many countries will Israel bomb this November?

Half the market says 2. I suppose that's fair. 1 is extremely optimistic. 3 is a real dark horse at 12%. They could do 3 no problem if they get going...

🎱 CHART WATCH 🎱