We have had a big move up in both TYH and AGQ. I am taking profits in TYH at these levels. This does not mean the market won't move higher but it is approaching resistance levels and much of the buying is short covering.
The Dollar has been very weak today. We took profits in EUO a while ago when the COT indicators showed a large speculative short position in the Euro. COTs are not always right but here is a good example of what happens when they are. The COTs for Gold and Silver do not show a large speculative long or short position but they do show heavy short covering by the dealers. Open interest on Comex for Gold and Silver has dropped significantly. This is as much as anything due to a combination of factors - the perception, accurate in my view, that dealers and the FED manipulate prices and because margins are now so high that it is almost as easy to trade the physical market. If the FED can engineer a good recovery here through to the election we will see a substantial rally in PMs. If they cannot keep a lid on Europe we could see a continued sell off. If you own physical metal you should keep it. Trading things like AGQ is risky but can be rewarding.
The Dollar has been very weak today. We took profits in EUO a while ago when the COT indicators showed a large speculative short position in the Euro. COTs are not always right but here is a good example of what happens when they are. The COTs for Gold and Silver do not show a large speculative long or short position but they do show heavy short covering by the dealers. Open interest on Comex for Gold and Silver has dropped significantly. This is as much as anything due to a combination of factors - the perception, accurate in my view, that dealers and the FED manipulate prices and because margins are now so high that it is almost as easy to trade the physical market. If the FED can engineer a good recovery here through to the election we will see a substantial rally in PMs. If they cannot keep a lid on Europe we could see a continued sell off. If you own physical metal you should keep it. Trading things like AGQ is risky but can be rewarding.
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