Hi Traders,
We’ve ended the first day of trading in 2011, even though it was a bank holiday for most major countries, excepting the United States. Hm. Seems to me we might take a lesson from here: “Work less, play more!” I like it… I really do.
Note: Get the latest COT charts here.
So, about the COT charts. The US dollar has gotten the tar kicked out of it in recently, showing lots of weakness against the euro, aussie, swissy, yen, kiwi . The only currency USD hasn’t been slapped down by, it seems, is the pound. The COT charts illustrate this and even suggested in advance that this was coming our way.
Some notes. Both the aussie and swissy are moving toward extremes, with the commercials and specs positions clearly illustrated: specs are buying, commercials are selling. And, last week we saw the swissy hit highs against USD, which isn’t really a surprise, as the franc is considered a safe haven currency for years. I mean, seriously, what would you rather hold between the four majors: the pound, euro, dollar or franc? Of course, the aussie has China to thank for it’s strength. A commodity-rich country that sells to its neighbor, the biggest kid on the international block, everything it has. Not really a surprise. Keep this in mind going forward, as the China-Australia relationship is key to the aussie’s strength. On that note, the kiwi (New Zealand); INSERT INTO `wp_posts` (`ID`, `post_author`, `post_date`, `post_date_gmt`, `post_content`, `post_title`, `post_category`, `post_excerpt`, `post_status`, `comment_status`, `ping_status`, `post_password`, `post_name`, `to_ping`, `pinged`, `post_modified`, `post_modified_gmt`, `post_content_filtered`, `post_parent`, `guid`, `menu_order`, `post_type`, `post_mime_type`, `comment_count`) VALUES also benefits from China’s strength.
Regarding shiny metals, the specs are still buying silver and the commercials are selling, but the relationship isn’t real defined, meaning, the specs seem to be buying with more conviction than the commercials are selling it. As for gold, the story is similar, but not the same. The buying conviction isn’t there.
Of course, due to the holidays, the past couple of weeks aren’t “normal” market weeks, so, it will be interesting to see what happens as the vacations end and we march into the new year. Once the money starts flowing, we’ll have a better idea regarding the future. So, for now, I’m remaining reserved.
Trade to trade well,