Hi Traders,
Holiday greetings from a sunshiny Tampa Bay!
I hope all’s well and you haven’t lost your mind by visiting the malls and stressing-out over what to buy whom and where to get it for the very best price. And, with this in mind, I’m going to help make things simple and easy for you this year– I’d feel pretty darn guilty if I didn’t. So, know this: I love and appreciate gift cards to restaurants and even Starbucks. So, PLEASE don’t worry about getting me that “perfect” something; just pop that little card into the mail and, when it comes to me, you’ll be done. I thought you’d appreciate this selfless consideration and, yes, you’re very welcome ;- )
It’s a week from the normal two-week break see usually see this time of year, but, as in the past, we’ll likely see activity thin in prior to Friday. This doesn’t mean the market won’t move; if fact, if history is any indication, there’s a great chance we’ll see plenty of tradable swings. It’s just that there will be fewer participants. Here’s what’s happening regarding the COT:
(Get this week’s COT  charts here)
As I mentioned last week, the specs were buying AUD and might take another shot at the November high vs. USD. And we saw some buying, but nothing to get excited about. Same goes for CAD. Remember, both of these are commodity currencies and China and India need what they’re selling. So, as long as this relationship is in place, it’s good news for CAD and AUD. New Zealand, NZD, on the other hand, another “commodity” currency, hit extreme levels (i.e., the commercials and specs were 180-degree out from each other) and is continuing its slide. For anyone trading the kiwi, this shouldn’t have been a surprise, especially if you followed what I’ve written.
The euro is dealing with its five little PIIGS (Portugal, Ireland, Italy, Greece and Spain); 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 and keeps getting the snot kicked out of it. Overall, the specs are selling, even though we witnessed a pullback and some consolidation. Based on the charts, it looks like the euro will continue to nosedive. The same goes for the pound, which (like the kiwi); 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 was extremes not too long ago.
The US dollar has been the benefactor of all the bad news coming out of Europe, so, while its COT chart is a little muddy, I expect we’re going to see more strength as we head into the New Year.
The shiny metals, gold and silver both hit highs not too long ago, but haven’t made new ground recently. When it comes to silver, the commercials are buying and the specs are selling—remember, these two were 180-degrees apart not too long ago, which indicated price would likely turn. Have tops been made in both? Well, if you listen to 99.9% of the population, the answer is a resounding, “NO WAY”. But, personally, I try not to pay too much attention to what everyone is saying, because “everyone”, that is the general public, which includes the media (which includes CNBC); 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 has amassed quite a track record when it comes to being wrong. So, thankfully, we have the charts. And, as you might agree, “a picture is (or can be) worth a thousand words”.
That’s it for this week. Whatever you celebrate, please enjoy the magic and the spirit of the season. Across the miles, I wish you and yours my very, very best!
Be well and keep living large,