LEON's weekly COT report analysis

Discussion in 'Gold' started by leon1998, Apr 11, 2015.

  1. Porcello

    Porcello New Member

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    Don't swap dealers usually take the other side of large spec? If so, what extra info looking at swaps brings?
     
  2. Northerncoins

    Northerncoins New Member Silver Stacker

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    In the end, none of you know whats really going to happen, your going to jump on when things start climbing like the rest of us and jump off or hold when they fall, most of this other stuff that you think works using charts etc is just an illusion your in your mind. :p
     
  3. mmissinglink

    mmissinglink Active Member

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    Reminds me of a friend from years ago who played the horses (gambled on the cruel 'sport' of horse racing) and studied many books and charts by experts on horses for years. He averaged no better than the guy who never even so much as looked at a chart and placed a wager. Seems like half the time gut intuition beats out technicals forecasting.



    .
     
  4. sterling-nz

    sterling-nz Well-Known Member

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    If you are going to gamble ALWAYS go for soccer and take the 0.5 goals in first half.
    At the low end it will return 28% upto 80% and success rate is around 90% for certain leagues.
     
  5. mmissinglink

    mmissinglink Active Member

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    Exactly what i wuz thinkin'! :D


    .
     
  6. aleks

    aleks Well-Known Member Silver Stacker

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    You don't need to know "what's going to happen", equally like a casino doesn't know which cards are going to be dealt in blackjack, they work an edge consistently.


    Porcello the point I was making is kinda that, is there much difference between the Commercials in red in top chart and the swap dealers in bottom dis-aggregated chart in green? when both of them are heaviest net short over the last year/three price tends to peak and sell off, when they are the most bullish in a year/three years prices tends to make a bottom and rally

    I personally just use the commercials in aggregate irrespective of asset class. In gold, narrowing it down to swap dealers maybe worth looking into further :)
     
  7. Pirocco

    Pirocco Well-Known Member

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    A futures market is a hedging place. A way to avoid losing money to speculators, by inflicting those speculators a higher / faster rising price when they buy, the difference being the compensating money to make the hedge work.
    So for the price trend, it doesn't really matter which class does what, the whole matters, being the size of the hedge as such, expressed as a quantity of the commodity. A quantity that is ordered, but orders being delivered as cash instead of commodity, erasing the extra part in the price that the orders temporarly caused.

    A "heaviest" net short position implies a "heaviest" net long position.
    The former is talked about all the time, the latter never.
    Take a guess why.
     
  8. aleks

    aleks Well-Known Member Silver Stacker

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    I honestly can't make any sense out of your first paragraph.

    Do you not think that a company like Nestle would have a better understanding of the fundamentals of sugar and cocoa then a fund manager and retail traders? Who do you think is going to be better capitalised?

    Do you think the phenomena described in the above comment is inaccurate more often than not(ignore swap dealers if you want and just think the commericals)
     
  9. Porcello

    Porcello New Member

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    I do, but I'm not sure that trading on gold futures is based on the fundamentals of gold. Most likely it's based on technical analysis.
     
  10. Pirocco

    Pirocco Well-Known Member

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    All those active on a futures market have "better understanding" (read: just more data available) than others.
    The futures market, the whole of all trader classes, is nothing but the counterside of the stockpilers (speculator-savers) on the cash market.
    They want to lock in a cost / profit, and do so by temporarly altering the price until their transactions are completed. Those that buy during the existence of this hedging positions pay that extra price part more, and this way deliver the hedgers (all trader classes, the whole) the eventual loss-compensating dollars (and also eventual windfall gains are compensated / erased).
     
  11. aleks

    aleks Well-Known Member Silver Stacker

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    Those who can't do something will keep telling everyone it can't be done.

    I apologise that I said anything to begin with.
     
  12. Niveka

    Niveka New Member

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    Leon,

    There are a few folks on here that consistently give you a hard time, and for the most part you don't let them get to you. I sense in this thread they may have gotten to you a bit only because you bothered to reply to their same old tired posts, you usually just ignore them. These guys say the same crap over and over, their hubris dripping from every word they type. They present themselves as if they are the voice of this community, giving you instruction on how to better construct your posts so that you will not deserve the vitriol they spew at every post you make. Rest assured, they are not the voice of this community and there are plenty of people here that appreciate your contributions to this forum. I am in the process of getting ready to take a strong short position in this next leg down, I agree with your position and it is good when preparing to invest substantial sums to hear others who have come to the same conclusions that I have on my own. Carry on soldier, we shall descend this ridge together and find the pile of gold in the valley below.
     
  13. leon1998

    leon1998 Member

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    Thank you Niveka; also thanks people for their support on my threads.

    Although I trade paper myself, the purpose of my posts, is not encouraging stackers to trade paper; but trying to time the market when to buy physical.

    Again, my read on past weekly futures report is BEARISH. Commercials/Banksters' position has short/long ratio of 1.8 for gold, and 2.3 for silver. Those are red alert signals for intermediate tops. The signal's reliability is about 80%. For myself, I am going to short this pop, instead of hoping for a breakout.

    For those itchy to buy physical, My weekly GLD chart, indicates that there might be one dip in late November and another bottom next April.
     
  14. Ronnie 666

    Ronnie 666 Well-Known Member Silver Stacker

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    Good luck with the short position Leon. I don't think for 1 second you or anyone else can predict this market short term. We all saw the reports last week predicting a fall in PM. Look at TF metals report - Friday and the free report on the weekend. You are not telling us anything we already don't know. Maybe you get lucky and win a few paper $ on the paper roulette market maybe you don't. All I know is that over the past 15 years or so since I got into PM I have never regretted buying physical and almost always regretted not buying more. My advice to new members is don't get sucked in by Leon's promise of great and quick wealth, ignore his advice on paper derivatives, buy the real stuff on each dip - slow and steady according to your means. Don't over-commit, don't get greedy and you will not regret buying. Because we stackers have had this strategy for years and years of successful accumulation we don't appreciate being called trolls because we disagree with your plan. The only reason I post this is to warn off the newbies. Leon you carry on doing what you do - I just don't want people new to this site to follow you and get burned.
     
  15. Niveka

    Niveka New Member

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    Ronnie,

    Just a quick question, on your comment "You are not telling us anything we already don't know". For clarification, are you saying that we all know that spot is going to take a dive? If this is not what you meant, then what did you mean?
     
  16. aleks

    aleks Well-Known Member Silver Stacker

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    Regular service has been resumed ;)
     
  17. Ronnie 666

    Ronnie 666 Well-Known Member Silver Stacker

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    There are several well known commentators talking about an imminent correction in PM ( some predicted it to start this Monday). In fact I can probably list 3 or 4. On the other hand there are about 3 or 4 who say PM are going up? I have the understanding that unless you are on the board of the large bullion banks you know squat. I recognise that these short tem predictions are a waste of time and therefore (in my opinion) one plays the longer term game which is dependent on reality. Therefore, since 2000 metals are moving up and over the next years they will continue their upward move. As long as the world keeps on printing cash the prices of real items over the long term will increase. If the governments of the planet decide to stop printing then the game changes. I have seen no evidence of that have you ? Playing the short term paper game is in my opinion just gambling. Like all games of chance the odds are stacked against you.
     
  18. Niveka

    Niveka New Member

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    Well I think to say that "since 2000 metals have been moving up" is a little to broad-brushed for my taste. I'd zoom in a notch and say that since 2011 PM's have been moving down. It is the belief that they are not yet close to a bottom that presents an opportunity for people like leon, myself, and many others. If we feel confident that spot has to go down significantly before it starts going up then the risk of a short position is greatly reduced. For instance, if I take a short position and my timing is off and it heads into an upward swing its not a problem because I know I can wait and it will eventually swing back the other direction at which point I take my profits and start the cycle all over again. This only works if you have a true conviction that we will see $12US silver and $800US gold before things start going the other way. To each his own, investing is a very personal thing and it only takes that first time when you "gamble" a huge chunk of cash for you to realize that the only opinion that really matters to you is what you truly think will happen, this becomes very evident to you when you put your money on the line. So far it has been working well for me and I hope (and expect) that there will be plenty of opportunities to make money between now and when we hit bottom. FYI this strategy goes out the window the moment we do hit bottom because a short position will no longer have that "safety net" and then the situation is more like gambling as you described it because spot could go either way.
     
  19. Ronnie 666

    Ronnie 666 Well-Known Member Silver Stacker

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    Well Niveka I sited the year 2000 as that is when I started saving in PM. So if that is broad brushed or not is pretty irrelevant as it applies to me. The price in Au$ At this time is probably $150 off the all time high in gold so 95% of my gold purchases (all in Au$) were at a lower price. I agree silver is not as robust right now. However if you bought silver wisely you would still be in the black.

    Unlike you I don't see $800 gold or $12 silver Any time soon. If gold fell to $1000 it would simply disappear and silver at $12 would be diabolical. At $15 we see it vanishing off the shelves. So while we can see prices drift sideways in the short term I cannot see those lows at this time. So to me it's no issue buying PM now even if I bought at $350 a decade or more ago.

    Your opportunity is to accumulate physical metal right now. I cannot understand your idea that if it goes up and your short position is destroyed its not a problem because it will go down again. That is the strangest comment I have heard. Your strategy is based on lower prices and that is just an opinion? My opinion on higher prices may in your opinion be wrong but the worst that will happen is that my physical PM value will fall for a short time. I will not lose my position. The risk is small and very limited. Your short position is not.
     
  20. Niveka

    Niveka New Member

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    I'm not sure how to explain it any clearer but let me try. If spot is at $15US and the long term expectation is $12US and I think we are heading for a dip and I want to make money on that dip I take a short position. If my timing is right and the dip happens I make money. If my timing is wrong and spot goes up, because I am confident that that the bottom is yet to come, all I have to do is wait to close my position at a time when I don't lose any money, i.e. the safety net. Hope this clears things up...
     

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