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EDITORIALS
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Why Higher Stock Market Highs Matter ciovaccocapital.com
2014-07-25 12:44:20.0
Post with charts is available on
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Gold?s Strong Season Starts zealllc
2014-07-25 12:35:54.0
Gold has just hit its major seasonal ebb of the summer, heralding the arrival of its powerful fundamentally-driven strong season.
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188 Stocks that Could Benefit from a Short Squeeze Greg Guenthner
2014-07-25 10:28:29.0
Dull market boring you to death this summer?Maybe it's not the market.
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Gold Price "Can't Rise" as Weak Asian Demand, Technical "Correction" Take Out 50- and 100-Day Moving Average Adrian Ash
2014-07-25 09:14:35.0
GOLD PRICES headed for their lowest Friday close in 6 weeks in London today, trading sideways at $1295 per ounce as European stock markets failed to follow Asian equities sharply higher on the day.
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More Weakness Ahead for the Miners Jordan Roy-Byrne, CMT
2014-07-25 04:39:04.0
No pain, no gain.
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We have a Bubble in everything ' From Stocks to Bonds, Real Estate, High-End Real Estate and even Art MarcFaberBlog
2014-07-25 04:20:09.0
'we have a bubble in everything ' from stocks to bonds, real estate, high-end real estate and even art.
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The Case For $5,000 Silver ? Yes, $5,000 Silver Lorimer Wilson
2014-07-25 00:51:28.0
If the price of silver were based directly on the real physical silver market, silver's price should be at $5,000 an
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How Much Time Before ?The 7 Bubbles of America? Start to Burst? Lorimer Wilson
2014-07-25 00:51:28.0
History has shown us that all financial bubbles eventually burst.
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5 Unique And Clever Ways To Use Chapstick martenson
2014-07-24 21:13:11.0
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Off the Cuff: Do Geopolitics Matter Anymore? martenson
2014-07-24 21:13:11.0
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CHART OF THE DAY goldscents
2014-07-24 20:44:43.0
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Short Term Picture For Precious Metals Complex Is Mixed With Bullish Bias Gold Silver Worlds
2014-07-24 17:54:30.0
Today price decline in precious metals is said to be led by the news out of China that gold demand declined??19.
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August Gold Settles 1290.5, Down $13.90 Gold Silver Worlds
2014-07-24 17:14:43.0
Gold futures were under pressure throughout the session as safe haven and physical demand continue to ebb.
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3 Ways to Identify Your Own Private American Oasis Addison Wiggin
2014-07-24 17:14:39.0
Despite persistent rumors of an 'economic recovery,' we see regular stories like this…Phoenix: Police have proposed shrinking the number of patrol squads by 13.
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Is Investing About Pontification or Profits? ciovaccocapital.com
2014-07-24 15:32:07.0
Why Do We Invest?
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Gold And Today's Economic Danger Zone Gold Silver Worlds
2014-07-24 15:18:57.0
Ding, Ding! The bell tolls, not for the 1%, but for the remaining 99% in Europe, the UK, Japan, and the US.
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Forex Trading Alert: Dark Clouds Over GBP/USD SunshineProfits
2014-07-24 15:05:37.0
Forex Trading Alert originally sent to subscribers on July 24, 2014, 11:57 AM.
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The One Number Every Penny Stock Investor Overlooks Jonas Elmerraji
2014-07-24 15:05:28.0
I routinely get emails from my readers that goes something like this:'Why do you call your newsletter Penny Stock Fortunes when many stocks in your portfolio are priced at $40 and up? I was under the impression that a penny stock was to be $5 or maybe $10 and under.
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Winners and Losers in the Battle of Economic Stupidity Douglas French
2014-07-24 15:05:28.0
Turn on the tube and economic ignorance seems to be everywhere.
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Smart Investments in the Mobile Revolution Greg Guenthner
2014-07-24 15:05:28.0
Are you 'addicted to being distracted'?Don't worry' there's an app for that.
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LATEST NEWS
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Gold price trades near 5-week low
Fri, 25 Jul 2014 10:27:22 -0700
Customers look at various jewelry for sale at a shopping district in Beijing. (EPA)
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Which restaurant isn't on the Wine Spectator awards list?
Fri, 25 Jul 2014 10:22:53 -0700
The prestigious Wine Spectator Restaurant Wine List Awards have been announced for 2014.
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Osisko Gold Royalties Announces Flow Through Private Placement Into NioGold Mining
Fri, 25 Jul 2014 10:15:00 -0700
Osisko Gold Royalties is pleased to announce that it has signed a letter of intent with NioGold Mining Corporation pursuant to which Osisko will acquire 14 million flow-through common shares of NioGold ...
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Cerro Negro Achieves First Gold Production
Fri, 25 Jul 2014 10:13:00 -0700
Cerro Negro Achieves First Gold Production
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Gold & Silver Market Morning
Fri, 25 Jul 2014 05:53:42 -0700
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London gold fix company appoints committee to oversee benchmark
Fri, 25 Jul 2014 03:42:17 -0700
The company operating the gold price 'fix' has appointed a supervisory committee to oversee the century-old system of benchmarking gold prices ahead of the implementation of stricter regulations, its website showed on Friday. The London Gold Market Fixing Ltd's new board is made up of compliance officers at the four banks that currently set the twice-daily auction process over the telephone. The ...
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UK buying more Kiwi wine
Fri, 25 Jul 2014 02:11:30 -0700
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NZ wine favoured by British
Thu, 24 Jul 2014 22:40:34 -0700
New Zealand can claim another victory over Australians with research showing British wine drinkers prefer our vino to theirs.
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Why gold prices will remain lower for longer
Thu, 24 Jul 2014 22:12:28 -0700
After gold futures fell to a five week low this week on weak Chinese demand, analysts told CNBC prices were set to remain depressed for the rest of the year.
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Silver Ferns Tickets On Sale Monday
Thu, 24 Jul 2014 18:30:11 -0700
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New Zealand premium wine sales soar in the UK market
Thu, 24 Jul 2014 17:57:07 -0700
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NZ premium wine sales soar in the UK
Thu, 24 Jul 2014 17:37:26 -0700
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Ross' Gold Comments on Recent Stock Volume and Price Increase
Thu, 24 Jul 2014 17:28:52 -0700
Green and Hill Industries dba Ross' Gold has noticed a significant increase in the share price and trading volume of the Company's shares beginning Tuesday July 22, 2014 and continuing Thursday July 24, ...
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Gold Sells Off, Hits 4-Week Low, on Technicals, Less Risk Aversion
Thu, 24 Jul 2014 11:18:05 -0700
(Kitco News) - Gold prices ended the U.S. day session solidly lower and hit a four-week low Thursday. Less risk aversion in the market place this week, as evidenced by moves to record or multi-year highs in the U.S. stock indexes, put downside price pressure on the precious metals Thursday. Technical [...]
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You may be drinking fake wine
Thu, 24 Jul 2014 10:58:42 -0700
This wine scammer could face decades in jail.
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The Best Value Wines Are Priced Around $20 A Bottle
Thu, 24 Jul 2014 07:13:00 -0700
Why is wine so expensive? According to Xander...
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LATEST FROM BLOG
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How to use the Commitment of Traders Report?
Wed, 19 Jun 2013 18:08:00 GMT
The Commitment of Traders report (COT report) is a weekly report, which is issued on every Friday by Commodity Futures Trading Commission (CFTC). This report contains the details of the positions of all the market participants. Every report that comes on Friday contains the data as of the preceding Tuesday.
The role of CFTC is to Commodities Future & Options market what SEC is to equity markets. The COT is a very handy, reliable and important report as it has good deal of data related to the market positions and trends of various trader groups. It is very useful in understanding the current and future market movements.
The structure of the COT report is detailed and it provides data segregated into different trader groups. The three main categories being: commercial traders, non-commercial traders and non-reportables.
Commercial Traders: They are the main players of the Commodity future markets. They are essentially hedgers and their trades are for actual delivery of the underlying asset. They have the largest positions in the markets and are big entities like Producers and users/consumers. They have the best knowledge of demand, supply & market movements etc. and enter into contracts as per their requirements and forecasts.
Non-commercial traders: They are also generally big traders but unlike the commercial traders, their positions are mostly for speculative profits. They enter a position with a view to make money and exit the position long before the due dates.
Non-reportables: This is the smallest group of traders and consists of individuals or other small entities that trade on speculative lines. Their holdings are individually too small to be required to report to CFTC and hence the name.
Over the years, CFTC has been providing the report with the aforesaid three categories of traders. But in the recent years, it has started providing disaggregated reports, further categorizing the traders. The picture below illustrates the disaggregated trader categories.
In the above classification, Swap dealers represent the Pension funds, endowments etc. These funds rather than directly trading in the future markets, work through the services of Swap dealers.
Basics of COT report
The COT report is a very valuable source of information, which can be used to get an idea of the future market movements and accordingly device a trading strategy. Let's take a sample COT report of Gold Futures dated 11th June and try to understand the basic data sets and their implications.
A gold future contract is of 100 Troy ounces and the above report is a part of the COT report on metals issued by CFTC on 14th of June, 2013. The report shows the category wise positions as on June 11th. In each category, the long and short positions represent the number of contracts held. The total open interest shows the sum of all contracts (both long & short), that have neither expired nor settled. From the above data, we can get the following perspectives about the current market conditions.
The total open interest is 373,844, which is marginally up by 783 from the previous week. This indicates a bit higher market participation. The benefit of an increased open interest is that a higher number of transactions take place increasing the liquidity. At the same time it also indicates better market conditions for trading and may be a sign of trend reversal.
The net position of Producers/Merchants category is still on the bearish side but compared to last week it shows increase of 3,251 in long contracts. Remember that this group has the best knowledge of the markets and they are bearish with slight movements towards bullish side of the fence. This movement towards long position may be short term or long term. Now if we look at the data of past few weeks, we will observe that there is a gradual increase in the long position of this group. The total extent of their short positions has been decreasing over the time. This may indicate a positive outlook for gold in the future.
The swap dealers reflect the same approach as far as the net position is considered.
Managed Money traders have a contrarian position. This may be due to the longer time frame that they generally target, eliminating the reflection of short-term market sentiments in their position.
Other reportable and the non-reportables are generally market followers. They are mostly in a position opposite to that of commercials. One thing that you should always avoid is to follow the trend of non-reportables.
The current COT report can further be compared to the past data and more inferences can be deduced. For example, if you compare the open interest with past data, you would see that it has been falling and has dropped quite low. Also this drop has somewhat stabilized over the past few weeks and it seems to be bottoming up. This indicates that a strong level of support for the gold prices may have been achieved and there are pretty good chances of a trend reversal.
Some takeaways
Now since you have some understanding of how to use COT report, you must keep the following points in mind while using it.
COT report comes with a time delay of 3 days. This is a dampening factor to the uses of the report in framing intraday and very short-term trade strategies.
The data content is excellent and reliable. This makes it a great source of getting market insights.
Further derivations of the COT report in the form index creation or indicators etc can further add to its utility.
Use other tools in combination with COT insights to validate your analysis.
COT report as such is of great value. No wonders why CFTC has to give in to the demands of weekly reports from the market participants, rather than the bi-monthly report that it used to provide in the past. That's all as of now. Happy trading!!!
From quantshare.com
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Gold and Silver Speculator Long Positions Wiped Out
Fri, 26 Apr 2013 21:17:00 GMT
Small speculators, also known as individual investors, have had their net long positions in gold and silver completely wiped out over the last two weeks. As of last Tuesday, these small investors held a mere 133 net long gold contracts, and 2163 net long silver contracts. As recently as September, when we turned cautious on the metals, small speculators held over 60,000 net long gold contracts and 20,000 silver contracts. If the small speculators were to sell anymore gold and silver, they would become net short.
Typically commercial banks manipulate prices on low volume to set the price and then trade at the newly set price in volume. The recent crash in gold and silver began after hours on a Friday, and was hit further by large sell orders Sunday night to take out the well known technical support lines of both metals. Most small retails investors were probably not even contacted by their futures broker. By the time they checked their account the next Monday Morning, either their protective stop orders were triggered or the margin clerk forcefully closed their position. The snowball effect in margin calls and stop loss orders was great enough to last several days.
None of this is surprising. However, we were quite surprised to see that net short positions of commercial traders rose substantially during this period. Typically they would be expected to cover their short positions at lower prices, mopping up the losses of retail investors.
This reveals several important changes to the gold and silver markets:
1) It took an enormous number of short positions added to move the market even on a weekend.
2) The gambit failed, as they were not able to cover these positions in volume after the dump. Nevertheless, as we have been expecting for several years, the commercial traders will be net long before the metals make new highs. But if they can't cover at lower prices, they will begin covering at higher prices as we saw when silver rose from $20 fall 2010 to $50 in spring 2011.
We suspect that the failure of the gold gambit is largely due to the unexpected surge in GLOBAL demand for physical metal. Premiums on bullion products are higher than they were during the 2008 crash, with even junk silver selling at $5-$6 over the paper spot price. This is unprecedented.
The consolidation in gold and silver over the last two years has been painful, especially for mining investors. However, with the prices of the metals at or below production costs, along with shortages of retail bullion products, and zero net long small investors, we are struggling to identify any more sellers. The summer season is typically weak for precious metals, and they could easily back and fill a base over the next six months, however the risk in accumulating physical metals in this price range is very low. We also believe that producing miners with cash holdings represent substantial value at this time.
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Caution Advised in Gold and Silver
Sun, 02 Sep 2012 02:35:00 GMT
Gold and especially silver have succumbed to a long a demoralizing correction over the last 12 to 18 months. The summer doldrums likely marked the bottom of this correction, and the metals have turn the corner higher. However, both gold and silver investors will likely have their resolve tested once again in the coming weeks before the metals are able to break higher.
Precious metals (GLD, SLV), and mining equities surged from their 2008 lows to their 2011 highs in reaction to massive monetary intervention, and an initial surge in inflationary expectations. Although interest rates have remained near zero, and real interest rates are clearly negative, precious metals investors have been disappointed by the ongoing global stagflationary wealth destruction, and the failure of further intervention by policy makers. The Federal Reserve has admitted that the US economy is weaker than desired, yet it has also continually disappointed in announcing a new quantitative easing as it seeks political justification.
The last two years of global policy makers kicking the can down the road, in conjunction with weaker demand from India, has created the environment for a severe correction in gold, silver, and miners. While it hasn't been the most severe in terms of percentage loss, it has likely been the most severe in terms of sentiment. With Europe, India, China, and the US all decelerating at a rapid pace, and the US fiscal cliff returning the political forefront, we believe that we are months away at the most from a turn in monetary policy. Verbal intervention has run its course, and real monetary intervention is a mathematical certainty.
Gold miners(GDX) bottomed in May, and are leading the metals. They are now overbought and could face a sharp correction before breaking out.
Gold and silver may already have begun pricing in future intervention, however commercial banks are not yet on board with the breakout in gold and silver. Net commercial short positions in both gold and silver, at a time when prices are near resistance levels and overbought are indicating that a short and severe correction could be imminent.
Silver has had an especially large spike in commercial short positions over the last three weeks.
The current commercial short positions in silver and gold must be reduced before the metals can break higher. In other words, commercial banks must cover the majority of their short positions. While they could cover as prices rise, history suggests that the most likely scenario is for the commercial banks to take down the price and cover at lower levels. This correction will likely coincide with the realization of a global recession/depression in 2013 and end with the realization of further monetary intervention.
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