Posted on 09/23/2007 1:50:53 AM PDT by joefrocks
The gold traders who know what they're doing, the savvy usually non contrarian gold Commercial Traders, are going massively short. They added a very respectable 17,083 short gold futures and options contracts in the latest report/5 day period ending 9-18-07, and, a massive 52,000+ short gold futures and options contracts in the previous report (possibly the largest weekly change I've ever seen), while also trading long in recent weeks (added 1303 long futures and options contracts in the latest report for the 5 day period ending 9-18-07, and, over 10,000 long futures and options contracts in the previous report), see the last/third data at COT Data.
This jives with HUI/XAU possibly putting in very important countertrend Wave B (of the Wave 2 Cyclical Bear Market since 5-11-06) double top cycle highs early today/Friday 9-21 (5 Day HUI Chart), with HUI putting in (potentially) a bearish double top at 402.27, only 0.14% above the Wave 1 Cyclical Bull Market cycle high at 401.69 on 5-11-06, see HUI Chart, and, with the XAU putting in (potentially) a bearish double top at 173.17, only 0.85% above the Wave 1 Cyclical Bull Market cycle high at 171.71 on 5-11-06, see XAU Chart. The huge spike move since 8-16-07 is typical of what happens near very important cycle highs.
Also, the NEM Lead Indicator is SCARY. The NEM Lead Indicator = +0.07% versus the XAU today/on 9-21, -1.46% versus the XAU on 9-20, +0.69% versus the XAU on 9-19, -2.33% versus the XAU on 9-18, -0.53% on 9-17, +0.12% on 9-14, -1.34% on 9-13,+0.02% on 9-12, +0.25% on 9-11, -0.69% on 9-10, +0.42% on 9-7, -1.39% on 9-6, +0.06% on 9-5, -1.81% on 9-4, -0.98% on 8-31, -0.03% on 8-30, -1.86% on 8-29 = an extremely bearish -10.79% versus the XAU the past 17 sessions, see six month NEM Lead Indicator at NEM Lead Indicator Chart.
While Wave B cycle highs technically should be below the "ultimate" cycle highs, the market isn't an exact science (definitely a science though), indexes' components are changed periodically, and, often cycle highs will occur in dramatic rollover mode, that's very similar to a countertrend Wave B upcycle (basically the same as a Wave B when double tops occur, which is what might have happened today with HUI/XAU). The point being that, if one was in a basket of HUI or XAU components, the time to sell was in May 2006 not September 2007.
HUI/XAU should head down to their primary multi year Secular Bull Market (since late 2000) trendlines at 220ish and 90ish in the next 3-6 months, see charts 7 and 9 at HUI/XAU Charts. Gold should head down to it's primary multi year Secular Bull Market (since April 2001) trendline at $475-500 in the next 3-6 months.
Fundamentally, the current deflationary real estate/mortgage bust is a major negative for gold, just as the inflationary real estate/mortgage boom from 2002-2006 was a major positive for gold, coinciding with gold's Wave 1 Cyclical Bull Market from April 2001 until May 2006. Gold does well in inflationary economic cycles and gold does poorly in deflationary economic cycles, which is pretty basic stuff that a true gold analyst would understand.
bttt
Or is China just manipulating precious metal markets to buy additional inventory?
The current real estate/mortgage/credit bust is a deflationary cycle that will last for years, and, is a major negative for gold.
Any gold manipulation is short term in nature and doesn’t alter the big picture cycles in a meaningful way. Gold has risen about 2% in 16 months, from May 11, 2006 until Friday 9-21-07. That’s NOT a bull market move.
London fix is down 733
London fix is down 743 now...
I call BS. At the time that document was posted, Gold was in fact consolidating from a previous runup.
But the world is addicted to printing paper currency to cover government deficit spending. Until THAT problem is cured... the Gold Bull market continues...
Up up and away
Although there is some merit in interpreting the shorts as an indicator of decline, the chartist mumbo jumbo is the modern equivalent of entrail reading.
Until the $ turns, hold on.
Today? ~950
One more thing.
Later this year the Arab friends of America fearing Obama will act to reduce the price of oil, strengthen the $ and allow the price of gold to begin a slow decline
I think it hit 947 at one time today. I don't think it is done by any means.
Just 'cuz you like financial threads.
Cheers!
Well, looks like to me all those guys got their “shorts” handed to them. LOL.
They all have been wrong since the word Go - ld.
lol...gw.....methinks that is NOT the reason why you ping...
Then what reason do you think he pinged you?
I have my suspicions. What’s it to you, anyhows?
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