Commitment of Traders
For the last three weeks, gold has experienced something that has never happened before - hedge funds aggregate net position has been short for the first time in history. However, as Dana Lyons notes, this week saw another 'historic' shift in gold positioning as commercial hedgers shifted to the least hedged since 2001... so the 'fast' money is chasing momentum and the 'smart' money is lifting hedges into them.
Initial conditions matter when contemplating impact of Greek referendum
A look at the psycholgoy of traders as reflected in the price action ahead the new week which promises to be eventful.
Explosive moves ahead...
"It occurs to me that such massive speculation in COMEX silver futures may not be in keeping with the spirit and intent of commodity law and may suggest something is wrong with the price discovery process, since real producers and consumers of silver don't appear to be represented.... As one of the largest primary silver producers in the world, we feel that an effective and fair pricing mechanism is critical for the healthiness of our industry and for the millions of people impacted by what appears from the outside, to be manipulative practices by a concentration of players."
Dollar downmove still seems corrective in nature. Fed hike in September still seems most likely scenario. Taalk of US recession is over the top when unemployment, broadly measured is falling and weekly initial jobless claims are at new cyclical lows.
Yogi Berra, one of the keenest observers of the human condition, is said to have once remarked "It is tough to make predictions, especially about the future." And so it is.
A look ahead at the major drivers in the days ahead.
Hint: Take a look at the latest COT reports!
Technical outlook in the week ahead for the dollar, 10-year yields, oil and S&P 500.
Simple near-term outlook.
It’s not entirely clear what will happen in the near term, but the financial markets are already pushed to extremes by central-bank induced speculation. With speculators massively short the now steeply-depressed euro and yen, with equity margin debt still near record levels in a market valued at more than double its pre-bubble norms on historically reliable measures, and with several major European banks running at gross leverage ratios comparable to those of Bear Stearns and Lehman before the 2008 crisis, we're seeing an abundance of what we call "leveraged mismatches" - a preponderance one-way bets, using borrowed money, that permeates the entire financial system. With market internals and credit spreads behaving badly, while Treasury yields, oil and industrial commodity prices slide in a manner consistent with abrupt weakening in global economic activity, we can hardly bear to watch...
Simple cogent analysis of the price action in the capital markets. Take it or leave it.
Data and market positioning can explain movement in the currencies. It does not prove that there is no manipulation or a great conspiracy. It just means the markets are understandable without resorting to such explanations. Try it.
You might not like it. You may think it is a joke. Yet the fact of the matter is the dollar is posied for further appreciation. Be prepared.