COT Data And Near Term/Long Term Thoughts
The latest COT data doesn't point to a brutal decline this week, see http://www.cftc.gov/dea/options/deacmxsof.htm, but the gold Commercial Traders may have been conservative about short selling ahead of last Tuesday's Fed meeting, and, the NEM Lead Indicator was a modestly bullish (for a one week timeframe) +0.83% vs the XAU last week, but, the prior seven weeks was a combined -9.01% (-0.86%, -4.31%, +0.21%, +1.07%, +1.67%, -2.24%, -4.55% ), which is very bearish. So, a modest rebound at some point next week is likely, but trading long is far too risky right now.
The fact that, over the course of the past eight sessions, HUI/XAU "approached" but failed to exceed the July 12 monthly cycle highs, is a major negative short term. As I discussed yesterday, it appears that Wave C down of the Cyclical Bear Market's (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) Wave A down may have begun on July 12, and, it may be doing an Elliot Wave ABC down up down pattern, with Wave C down having begun.
It could be that the gold Commercial Traders weren't aggressively short selling because of the uncertainty created by last Tuesday's Fed rate decision and accompanying statement. The bottom line is that I expect the XAU's Cyclical Bear Market Wave A down to bottom in the 100-110 range in the next few weeks, and, I expect the ultimate Wave 2 Cyclical Bear Market cycle low (in about 15 months from now for a total of 18 months since 5-11-06) to be in the 95-100 range, based on it's very long term upcycle/Secular Bull Market trendline since October 2000.
For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/
The fact that, over the course of the past eight sessions, HUI/XAU "approached" but failed to exceed the July 12 monthly cycle highs, is a major negative short term. As I discussed yesterday, it appears that Wave C down of the Cyclical Bear Market's (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) Wave A down may have begun on July 12, and, it may be doing an Elliot Wave ABC down up down pattern, with Wave C down having begun.
It could be that the gold Commercial Traders weren't aggressively short selling because of the uncertainty created by last Tuesday's Fed rate decision and accompanying statement. The bottom line is that I expect the XAU's Cyclical Bear Market Wave A down to bottom in the 100-110 range in the next few weeks, and, I expect the ultimate Wave 2 Cyclical Bear Market cycle low (in about 15 months from now for a total of 18 months since 5-11-06) to be in the 95-100 range, based on it's very long term upcycle/Secular Bull Market trendline since October 2000.
For recent action see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=. ....... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
12:03 PM
