DAN NORCINI ON THIS WEEKS COT REPORTS

Trader Dan Comments On This Week’s COT Report


Posted: Jun 26 2010 By: Dan Norcini Post Edited: June 26, 2010 at 3:47 am
Filed under: Trader Dan Norcini

Dear Friends,

This week’s Commitment of Traders reports details pretty much what we have come to expect in gold over the years; fund buying and bullion bank and swap dealer selling. What is interesting is the fact that gold soared into an all time record high with neither the Managed Money camp setting a record for a net long position nor the producer/merchant/processor/user and Swap Dealer camp setting a record for their respective net short positions.

Considering the sell off on Monday’s downside reversal day was included in the statistics, it is all the more remarkable that the Managed Money camp witnessed an INCREASE in their net long position. Apparently, the move lower Monday and the early dip overnight into Tuesday attracted more buying from this camp instead of selling.

The running off the long side was done by the “other reportables” crowd which includes CTA’s and other large players.

The small investor, the general public, did what the big managed money crowd did; they too increased their net long positions.

Based on this alone, we will need to see a CLOSE below Tuesday’s low near $1,233 to generate any large scale long liquidation. A close of such nature will indicate that the speculative long side is not buying the dip but is instead liquidating.

A push above $1262 will force short covering on the part of the “Other reportables” camp and some of the small specs.

DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/06/COT-6-25-2010.pdf