A few days ago you had a chart showing commercial net shorts
on gold at record highs.. What has changed since then, and how
reliable has this indicator been in picking tops or bottoms on
gold?
I've covered this is some of the recent newsletters. The
commercial net short is better for picking major bottoms rather
than tops for gold. When gold is trading in a normal fashion,
the commercial net short also works farily well for picking
tops. However when gold goes into a strong up move, the
commercial net short can stay elevated for long periods of time
(like it did form Nov 07 - Mar 08). Eventually the high net
short will come down along with the price of gold, but being at
high levels is not a sell signal by itself. We will continue
to monitor it of course.
Commercial Net Longs
Posted by mikeovanes on 9th of Oct 2009 at 01:17 pm
Dear Matt:
A few days ago you had a chart showing commercial net shorts on gold at record highs.. What has changed since then, and how reliable has this indicator been in picking tops or bottoms on gold?
Thank you,
Michael ovane
I've covered this is some
Posted by matt on 9th of Oct 2009 at 01:37 pm
I've covered this is some of the recent newsletters. The commercial net short is better for picking major bottoms rather than tops for gold. When gold is trading in a normal fashion, the commercial net short also works farily well for picking tops. However when gold goes into a strong up move, the commercial net short can stay elevated for long periods of time (like it did form Nov 07 - Mar 08). Eventually the high net short will come down along with the price of gold, but being at high levels is not a sell signal by itself. We will continue to monitor it of course.
Commercials [ Gold]
Posted by rbreese on 9th of Oct 2009 at 01:36 pm
Matt put up a long chart and explained the fact that Commercials have a Great record on bottoms but tops take longer to play out.