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Non-Tech : The Woodshed -- Ignore unavailable to you. Want to Upgrade?

To: nspolar who wrote (2026)	3/7/2004 3:10:46 PM
From: Louis V. Lambrecht	Respond to of 60914

Posted this chart Jan 20th with a warning: commercials a higher low in net shorts on the Jan 5th week). Just look at the gold price. Last time commercials were net positive was end of November 2002 (higher low early August). At that time, total open interest was rising, till end of September, as did PoG. It then muddled through. Btw: commercials do have their position a couple of weeks (2) before price changes. That is why I keep my eye on both series of data: open interest - while it rises, specs come in and support the price. CoT - when the commercials reverse position, PoG reverses a tad later. I am not hypnothised by absolute value, I prefer the distribution within a standard deviation channel. Meaning that even if commercials are not net longies, they have a relatively less short position. So the CoTs tell me that the commercials have covered the positions they can. (Remains that they still can reduce the shorts). But the total open interest tells me there are not enough specs there to drive the prices up. Although they are nearing a rebound level. As both data are at trend change levels, I expect the PoG to change trend also. But the commercials do need to increase their net short position, and the open interest should show more specs stepping in. As I have no immediate answer from here, I look at the Euro (57% of the Dollar index) for directions. If I am correct, the price action since G7 only was pure profit taking, followed by stop losses. And we are back at the S/R 1.235 which precluded the largest percentage drop of the currency. If Euro keeps rising, I'll sleep better till next Friday's CoT report. <g> So, Euro has to rise, the commercials do need to increase their net short position, and the open interest should show more specs stepping in. Dollar index, Euro, PoG: same boat, same journey for the present.