Gold Today
Like actors on a stage, the script of COT has been played out in the technical damage done by the hedge fund gold-operating Amateur's Society. These black-box boobs chase strength and weakness with piles of money that greatly exceeds their capacity to handle it.
They may be equity giants, but they are gold midgets. You can almost always fade their operation with a greater degree of accuracy than reading COT numbers. COT did not win here as much as the hedge-fund lemmings simply got a little push that started a new tradition of cliff-jumping gold-holders.
All you need to turn a black box is to hammer the momentum, and 160,000 longs are told not just to bail out, but to get short. These world-class morons have not figured out that gold is a peanut market in the form of liquidity. 160,000 longs cannot reverse to 160,000 shorts without ripping the market down $50 after goosing it up $50.
The most encouraging character of this gold reaction is the buyers taking in the gold-share liquidation common in such situations. This good buying speaks well for gold.
COT will try for the objective given to you yesterday. The most important indicators then in gold are the down-trend lines and power-down trend lines, more so than the present up-trend line as to when the price of gold re-enters a positive phase.
Please do not be concerned. As I see it -- and I feel I see it clearly -- gold will go to and through both $555 and $750 in the not-too distant future.
2006 will treat you very well.