Monday, February 7, 2011
Gold This Morning: SSHHH... Don't Wake the Sleeping Giant --Jon
Perhaps the fact that both Superbowl teams have yellow in their primary colors kept traders mesmerised on matters other than our market last night as volumes so far are as low as we have seen in recent months. Let's just segue to the facts. Open interest rose ~3,000 contracts for last Thursday's report; the GSR is slightly easier at ~46.10; and RSI remains ~46 leaving plenty of room for upside momentum. Digging a little deeper into 'facts' last week's COT report again showed large specs reducing both longs and shorts and while commercials liquidated over 10% of their long positions this was inexplicably offset by serious absolute short covering. This is the fifth week in a row by my count that the commercials have been net buyers and I ask myself...do they see shortages? Speaking of shortages the silver market is certainly sending that signal and there are an ample number of oracles dispensing inductive generalizations that add up to a trading position in which you sell the near month today and possibly buy back at a cheaper price a future month simultaneously...nice work. Today: If it looks like a duck, walks like a duck, quacks like a duck...It is a duck.