Copper: The fundies are really stacking up the long positions. The producers have been happy to oblige. The price action isn't all that bullish, although we are still clearly more bullish than bearish. A pair of my proprietary indicators have fired, suggesting at least a "correction" is on the horizon. Longer term, it is hard to imagine such economic strength in the world's economy as to push prices up 10% by year's end, but maybe so.
Natural Gas: Producers and funds seem to be on cruise control. Prices are oscillating between about $4 and almost $5. At the moment we look to be headed back to $4. A solid bottom could set up there, from whence an 80¢ or longer run up would be quite reasonable.
Crude: Producers are selling more than funds are buying; the balance is being absorbed by small specs. This tends to be somewhat bearish. Price action is more bullish than bearish. A rise of about $5/bbl will set up a prospective saddlepoint, by which I mean either a slide back to $90 and a rise to $115. A weekly close below $95 should see prices fall back into the high $80s. One of my proprietary gadgets thinks Monday needs to kick of a bull move or have a couple of down days, with the odds about 8 to 1 in favor of Monday and Tuesday having lower closes.
Bonds: In long bonds, the commercials are reducing their long positions. Those positions were taken during the mild swoon at the beginning of July. The commercials and small specs are still anticipating further increases in prices. The funds are on the other side. Price action is neutral. Perhaps I should call it a tipping point, though I'm not sure it is. I have reservations about how far is up, but I know that down can easily, over a period of years, cut prices in half.
The 10 year bond has rather a different CoT pattern. The commercials were never as long as in the 30yr, and the small specs have been taking almost half the short side, along with the funds. I assume this is all about budges and the Fed. The price action is little different from the long bond.
To state the obvious: EXPECT VOLATILITY WITH FREQUENT CHANGES OF HEART UNTIL D.C. SETTLES ON A BUDGET. INCLUDED ARE STOCKS, BONDS, FOREX, ENERGY AND PRECIOUS METALS. GRAINS ARE WORRIED ABOUT THE WEATHER.
Natural Gas: Producers and funds seem to be on cruise control. Prices are oscillating between about $4 and almost $5. At the moment we look to be headed back to $4. A solid bottom could set up there, from whence an 80¢ or longer run up would be quite reasonable.
Crude: Producers are selling more than funds are buying; the balance is being absorbed by small specs. This tends to be somewhat bearish. Price action is more bullish than bearish. A rise of about $5/bbl will set up a prospective saddlepoint, by which I mean either a slide back to $90 and a rise to $115. A weekly close below $95 should see prices fall back into the high $80s. One of my proprietary gadgets thinks Monday needs to kick of a bull move or have a couple of down days, with the odds about 8 to 1 in favor of Monday and Tuesday having lower closes.
Bonds: In long bonds, the commercials are reducing their long positions. Those positions were taken during the mild swoon at the beginning of July. The commercials and small specs are still anticipating further increases in prices. The funds are on the other side. Price action is neutral. Perhaps I should call it a tipping point, though I'm not sure it is. I have reservations about how far is up, but I know that down can easily, over a period of years, cut prices in half.
The 10 year bond has rather a different CoT pattern. The commercials were never as long as in the 30yr, and the small specs have been taking almost half the short side, along with the funds. I assume this is all about budges and the Fed. The price action is little different from the long bond.
To state the obvious: EXPECT VOLATILITY WITH FREQUENT CHANGES OF HEART UNTIL D.C. SETTLES ON A BUDGET. INCLUDED ARE STOCKS, BONDS, FOREX, ENERGY AND PRECIOUS METALS. GRAINS ARE WORRIED ABOUT THE WEATHER.
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