The Gold COT (Commitment of Traders) Data Is Mixed
I continue to be very impressed with the generally non contrarian gold Commercial Traders. In the week ending 9-26-06 they sold 5,593 long futures and options contracts and covered 9,058 futures and options contracts (see http://www.cftc.gov/dea/options/deacmxsof.htm), correctly anticipating gold's strength last week, but also looking for substantial weakness in the near future by liquidating a significant part of their long position.
In evaluating the COT data and the indicators the most important consideration is cycles, which is Wave C down (probably began on Thursday for HUI/XAU) of Wave A of their (HUI/XAU) Wave 2 Cyclical Bear Market since 5-11-06 (see second chart at http://www.joefrocks.com/GoldStockCharts.html). So, while the significant short covering and the fact that they traded net long by 3465 futures and options contracts points to some strength next week, the tone next week could and probably will end up being weakness (potentially severe) rather than strength.
The past fifteen weeks the NEM Lead Indicator is a very bearish -17.16% versus the XAU. A vicious multi week decline, similar to the one that occurred from 5-11-06 until 6-13-06 for HUI/NEM/XAU, began on 9-6 for HUI/XAU and on 9-5 for reliable lead indicator NEM. Wave C down/another brutal decline may have begun on Thursday for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, probably in the 100-110 range for the XAU. 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/
HUI NEM XAU
In evaluating the COT data and the indicators the most important consideration is cycles, which is Wave C down (probably began on Thursday for HUI/XAU) of Wave A of their (HUI/XAU) Wave 2 Cyclical Bear Market since 5-11-06 (see second chart at http://www.joefrocks.com/GoldStockCharts.html). So, while the significant short covering and the fact that they traded net long by 3465 futures and options contracts points to some strength next week, the tone next week could and probably will end up being weakness (potentially severe) rather than strength.
The past fifteen weeks the NEM Lead Indicator is a very bearish -17.16% versus the XAU. A vicious multi week decline, similar to the one that occurred from 5-11-06 until 6-13-06 for HUI/NEM/XAU, began on 9-6 for HUI/XAU and on 9-5 for reliable lead indicator NEM. Wave C down/another brutal decline may have begun on Thursday for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, probably in the 100-110 range for the XAU. 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/
HUI NEM XAU
posted by Joe Ferrazzano at
10:14 AM
