......................NEM Scare And Bullish COT Data

NEM gave me a big scare as it plunged mid session, appearing like it was going to fill it's downside gap at 46.12 from two days ago. The huge problem with that though was that NEM's short term cycle low two days ago was at 46.09, so if 46.12 got filled that meant 46.09 probably would have been taken out and therefore a short term upcycle wasn't in effect and my assessment of the longer cycles would probably have been flawed, meaning that the monthly upcycle probably had turned down IF NEM took out 46.09. Luckily NEM put in a very short term cycle low at 46.22 then rallied smartly at session's end to 46.70ish before taking a modest plunge to close at 46.48. The bid is 46.51 and the ask is 46.75 after hours right now which is a good sign. NEM slightly underperformed the XAU by -0.05% today, but the gap with the XAU narrowed near session's end which points to strength early on Monday 12-5.

Notice that a sharp rally did occur following the late session very short term cycle low, so XAU Implied Volatility and the XAU Put/Call Ratio did correctly portend strength following the intraday cycle low.

The COT data is basically bullish with the gold Speculators trading net short and the gold Commercial Traders trading net long, but the unusually large (> 10% increase in long position) long trade by the Commercial Traders does point to some weakness, but some of that weakness has already occurred because the data is as of Tuesday 11-29. See http://www.cftc.gov/dea/options/deacmxsof.htm Ciao!