Well, considering he's been wrong a lot on the way down, ggg:
Kaplan says: The overall outlook for gold and its shares has fallen like a rock from SLIGHTLY BEARISH to STRONGLY BEARISH. Commercials have been unusually aggressive in shorting gold into the recent rally, which bodes poorly for the near future for the yellow metal.
Regarding TRADERS' COMMITMENTS ( COT ) :
As of August 14, 2001, released at 3:30 p.m. on August 17, 2001, the commitments for COMEX gold futures showed commercial insiders long 26,735, short 81,962; speculators long 50,435, short 17,566. Small traders were long 32,023, short 9,665. Commercials were thus net short 55,227 contracts, having increased their short position from the previous week by 48,089 as the gold price rose $9.35. This represents an astounding deterioration under these circumstances. This indicator has therefore dropped sharply to STRONGLY BEARISH.
SUMMARY:
My current outlook for gold and its shares has deteriorated sharply to STRONGLY BEARISH. The most recent COMEX gold traders' commitments demonstrate that commercials continue to be VERY price sensitive, and are aggressively selling gold short about 5,500 contracts for each one-dollar move upward in the gold price. This is unusually bearish, since in general, commercials accumulate six thousand contracts per dollar drop in the gold price when the price is either below the pivot or less than one percent above it, and sell short slightly more than two thousand contracts for each one-dollar rise in the gold price above that level. As gold moved higher in recent days and the XAU completed a false bottom at 52, commercials have not only been selling gold short, but also intensifying their short positions in currencies including the Swiss franc, euro, Canadian dollar, and Mexican peso, and have recently gone short the British pound and Australian dollar, and even the Japanese yen. What all of this means is that the U.S. dollar is poised for a sharp move higher over the next couple of weeks, which will be negative for gold. The recent underperformance of the XAU, which often leads the price of gold at major turning points, is also noteworthy, confirming this analysis. Meanwhile, the U.S. stock market, especially the Nasdaq, has been showing underlying resilience in the teeth of very high put-call ratios and a historic high in the 10-day average TRIN ( Arms index ) reading for the NYSE. Therefore, the U.S. stock market should move significantly higher between now and Labor Day ( September 3, 2001 ) . Readers should sell their gold mining shares and buy QQQ. Aggressive readers should sell short gold mining shares.
Could this be a contrarian indicator??
VBG
Roebear |
