from the ta boardYes, but one can say all of techncial analysis has its limitations.
COT is just one of many indicators to look at....the more the merrier
but not all indcators are equal and trying to determine which are more important than others something I am still working out
for example is readings from a weekly chart more important than those on the daily, less
some people base decisions on five minute charts...I guess it depends on the time frames one is comfortable with....for me my biggest successes have come when I am looking at months up to two years (oil and gas and golds)
as my time frame shrinks..weeks,, days...my results have been much spottier
One thing I like doing is trying to imagine what "perfect" combination of indicators would show a good time to buy golds
best time to get into gold would be when the specs are net short and the commercials net long and the USD overbought and shares of bullion funds are trading at a discount to thier NAV
If you look back you will see, for the COT and bullion exchange funds that these conditions existed in Dec (you should have seen the gold boards up to that time.the exact opposite of today)
those who had money in gold stocks at that time made a killing
All I am saying that if history and past performance showed that was the best time there is an argument to be made that a bad time to get into golds is when the spec are net long (multi-year highs) and commercials net short and bullion fund shares are trading at a 16% premium and USD is at oversold
the odds are not in the long's favour.....what they need is TREMENDOUS news to get more people to come in and take thier assets off their hands at a profit.....and bacasue there is a record number of longs that upside may be capped
it also means that while waiting for that news, they are very vulnerable to bad news, indeed even less thatn perfect news. Look at NRI...nothing bad to report but placer NR was not "perfect" and down she went...look at meridian...just a whiff of an unflattering article and down she went
goldcorp? nothing new..but hey if there are problems with meridian? down she went
Kinross.? In Dec if they had annoucned additioanl financing (survivavibility, exploration growth)the stock would have gone up...this week the opposite effect (dilution)
the bias seems to the downside
You have lots of people who bought in at levels higher than today who are praying for gold to come back,,,maybe even make a profit but are horrified at the thought of a collapse
you have lots of people who got in really early, saw their paper profits explode to the peak, but have been eroding since then
It doesn't necessarily mean that gold won't break 330....but it does hint that it won't stay there long....and all that will happen is the exchange of smart money for dumb money
for a sustained rally, gold needs nothing less than the complete collapse of the dollar and nearly anyone who hass any pull in this world do not want to see that happen..not the Japs, not the europeans, not the arabs and not "nationalisitc" republicans
of course saying all that...I keep checking in a few times a day to see what is happening....becasue there are a lot of smart people I know who are into golds and
becasue you just never know