LowKeyMacro

Market diary

[Stocktwits @Stocktwits]

Trump at 5:59pm on Sunday

[LowKeyMacro @lowkeymacro]

Had no idea that a Chinese LLM listed earlier this year

GLM-5.2 (released June 17, 2026; 744B-parameter MoE, MIT-licensed) scored 62.1 on SWE-bench Pro (vs GPT-5.5's 58.6) and ranked #2 on the blind Code Arena (Elo ~1,595).

[LowKeyMacro @lowkeymacro]

https://t.co/mrwGpPZEuz

[Balto Star @baltostar]

SPR is stored in salt caverns with the pressure of the crude oil + replacement brine keeping the cavern walls & ceilings structurally intact.

But brine is denser than crude. So the higher the ratio brine/crude, the lower the pressure, the higher the risk of salt creep and ultimately salt falls which is collapse of walls/ceilings.

Every collapsed cavern traps the remaining crude. It's no longer possible to pump out crude and pump in brine.

So it doesn't matter to what degree Trump is mentally unbalanced or mentally ill, because past a certain point, depletion will trap the remaining crude.

Estimates are at 140-150 MMbbl the risk of wall collapse is extreme.

But we have another limit which is flow velocity.

At full capacity 715 MMbbl, max flow is 4.4 MMbbl/d

Currently at 350 MMbbl, max flow is substantially lower, perhaps 2.8-3.1 MMbbl/d.

For 200-300 MMbbl max flow drops down to range 1.9 - 2.5 MMbbl/d.

At 150 MMbbl max flow drops sharply below 1 MMbbl/d.

Note that 243-252 MMbbl statutory & strategic limits kick-in that a president can not easily override.

Keep in mind that primary purpose of SPR is response to natural disasters such as severe winter snowstorms/blizzards, tornadoes, hurricanes, floods, earthquakes, wildfires. This is where the max flow is needed.

So depleting SPR below 300 MMbbl is playing with matches & gasoline, not because we're running at 1.1-1.3 MMbbl/day, but because our max flow is no longer an adequate response to natural disaster emergency need for fuel.

[LowKeyMacro @lowkeymacro]

US SPR draw rate of change declining as pressures change reducing the amount that can be drawn on a daily basis 4mmbbl/day > 1mmbbl/day

The reckoning is coming

[LowKeyMacro @lowkeymacro]

https://t.co/myn6AmbTvb

[LowKeyMacro @lowkeymacro]

US SPR: 365.1m barrels as of 22 May, down ~50m since releases started. At ~8.2m barrels/week, it reaches the 252.4m barrel limited-drawdown floor in late August (daily flow rates slow substantially). The ~150m barrel physical stress zone follows in Oct/Nov.

[LowKeyMacro @lowkeymacro]

The SPR draws can plaster over some of the issues but unless there's a price response that creates some demand destruction, we are running into a wall.

Hard to see a way out without oil going vertical

[LowKeyMacro @lowkeymacro]

There's a disconnect between the oil prices and the supply disruption that's been caused by the closure of the Straits of Hormuz.

Both the US and Japan look like they'll start to have problems with their SPR inventory draws in 4Q26 if not before

[LowKeyMacro @lowkeymacro]

At the realized 2026 release rate (1.8 mb/d): 146 days / 20.9 weeks → August 19, 2026 for government-only reserves; 261 days / 37.3 weeks → December 12, 2026* for government + private; 266 days / 38.0 weeks → ~December 17, 2026 including joint stocks.

[LowKeyMacro @lowkeymacro]

Apparently the only thing that matters is flows now, Iran has said they will hit back with 1.5x the force and withdrawn from negotiations. Bombs are flying and futures refuse to move

[LowKeyMacro @lowkeymacro]

If you feel like you've messed up an AI trade, don't forget that Bain Capital took Kioxia private in 2018 for USD18bn, then subsequently listed it in 2024 for USD6bn before it rose >40x with the AI/memory boom

[LowKeyMacro @lowkeymacro]

@WOLF_Financial Have seen similar call option activity in smaller names Citrini has promoted recently

[Barchart @Barchart]

BREAKING 🚨: Japan

Japanese Crude Oil Reserves plunge by largest amount in history 📉📉

[The Kobeissi Letter @KobeissiLetter]

Such a divergence has never been seen in markets:

The S&P 500's 3-month implied correlation is down to ~15.0%, the lowest on record.

Implied correlation measures the extent to which stocks are expected to move in tandem, with a reading this low indicating significantly greater and independence among individual stocks within the index.

At the same time, the 12-month implied correlation of the Nasdaq 100 is down to 25.5%, also an all-time low.

This percentage has declined -35 points since 2022 and is well below the long-term average of 45.9%.

This is consistent with a highly concentrated market environment dominated by a narrow group of large-cap technology stocks.

Market leadership has rarely been this narrow.

[LowKeyMacro @lowkeymacro]

Seeing something similar with $DOW now

[LowKeyMacro @lowkeymacro]

Kicking myself that I didn't act with $DELL after seeing the call action, figured it had to do with earnings and it was but also the government contract