Title:   Weekend thread — refiner-crack "jaws of death", tightening gasoline, and a Korea topping tell (chat note)
Source:  Paulo Macro (Substack chat)
Author:  Paulo Macro
Date:    2026-JUN-18
URL:     https://substack.com/chat/2195305/post/45ac33d3-9b1a-410b-a1b3-973861a135ab
Type:    Written Substack chat note (no video, no timestamps). Saved for personal study.
Note:    Text saved verbatim as pasted. Dated Thu 18-Jun-2026: June opex moved to Thursday (Fri 19-Jun is the Juneteenth holiday — "tomorrow's holiday"; COT delayed to Monday), so the "weekend thread" is the start of a 3-day weekend.

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Weekend thread...

Jeez what a week. Pain everywhere, even if the S&P didn't show it. I personally touched a lot of grass this week. I'm not sure I remember the last time I and so many other managers were getting massacred like this. I'm not just talking oil or commodities. Generalist long/short, long only, retail... all massacred. Oh you like China/HK? Massacred. Your valuations are cheap? Massacred. EM? Massacred.

I don't know when it stops, but as mentioned earlier this week, options expiry today reset a lot of positioning. Of course, we have quarter-end now to look forward to (there's always something isn't there). And liquidity is *dreadful* so a lot can happen in both directions. But I do think we are close to another skid lower.

Three charts...

1) Refiner cracks vs oil. Behold the jaws of death. With cracks like these (and rallying - see how they lead crude input?), refiners will pant running flat out (except China - for now). Am hearing Chinese SOE refiners will run hard again in July and some were back lifting cargos earlier this week...which tells me some of them probably know product export ban is coming off (see this Sunday's note). That's my catalyst to close these Jaws of Death, and I'm sticking to it.

2) Gasoline front spreads (July-Aug)... they are twitching. Padd1 is getting scarce. Padd2 is tight on crude. WTI vs Brent has nearly priced out exports. It's just draws everywhere all over the place. But gasoline was always going to be the one to move first in June, and this week it moved (even front month RBOB vs WTI was twitchy). I'm sure there will be all sorts of jawboning. I'm also slightly concerned that what felt like liquidation in crude futures did not take out as much length as I would expect for crude at $75, but only Monday's Commitment of Traders will say for sure (delayed due to tomorrow's holiday). I will say this: sentiment is ABYSMAL. Like, crude bulls are beyond idiots abysmal. Vomit in the trashcan under your desk abysmal. But sentiment is not enough - we need positioning to reflect it. But the setup for whiplash is there. Cracks are ripe. Sentiment is putrid. Wishful thinking I suppose.

3) I am always eyes peeled for new highs into weak divergence (and if volume and sponsorship/breadth is weak... watch out). Exhibit C = MSCI Korea (EWY).

Feels like we are close to something.

Stay frosty... good weekend all.