Weekly Fundamentals - 18 June 2017

 
THE WEEK AHEAD FUNDAMENTALLY - KEY DATA TO WATCH OUT FOR
 
In conclusion to our report three weeks ago we wrote:
“The USD continues to fail to make new highs.
This continues to bode well for precious metals in the medium to long term.
Another interesting week in relatively thin summer trading.
Last week we wrote that risk higher, safe haven assets as measured by the 30 YEAR BOND higher and precious metals higher. We started that this is unusual and not sustainable and posed the question which would crack first.
From our COT readings it would continue to suggest that the precious metals are most vulnerable at this stage.
I also stated that post the UK election both GBP and EURO should move lower and start the
corrective move lower in the precious metals.
Nothing much has changed.
 
Therefore our recommendations for next week are:
Retain shorts in precious metals.
Begin to take profits on risk long positions.
Begin to buy VIX on any dips towards 10.
Remain short both the EURO and GBP."
 
Now let's see how we fared on our recommendations:
Retaining our shorts in  precious metals was brilliant
Taking profits on risk was also good as 2 out of our 3 indices fell
Buying VIX on dips towards 10 was given a good opportunity
Remaining short both the EURO and the GBP was good in the case of the EURO and not so good in the case of the GBP.
 
A very pleasing week.
 
An extremely quiet week in terms of data as the summer holidays are truly upon us.
 
USD:The US$ Index closed slightly lower last week.
On Wednesday we have Crude Oil Inventories and on Thursday the usual Unemployment Claims figure expected to rise from 237,000 to 241,000.
COT data shows that large commercials slightly decreased their net short position in the US$ Index from -34,272 to -33,935. We therefore remain SLIGHTLY BEARISH.
 
EURO:The EURO closed slightly lower against the USD last week.
There is no data for the EURO this week.
COT data for the Euro shows that large commercials slightly decreased their net short position last week from -91,005 to -89,928. This continues to be close to a 52 week extreme and we therefore remain VERY BEARISH.
 
GBP:The GBP closed sharply lower against the USD last week.
Only one item for the GBP which occurs on Tuesday when the BOE Governor speaks.
COT data shows that large commercials increased their net long position from +38,748 to +43,892 last week. This continues to remain near a 52 week extreme so we remain NEUTRAL.
 
YEN:The YEN closed marginally lower against the USD last week.
There is no data for the YEN this week.
COT data shows that large commercials decreased their net long position from +62,302 to +60,896 last week. We therefore remain BULLISH.
 
AUD:The AUD closed reasonably strongly against the USD last week.
On Sunday the RBA Governor speaks.
On Monday we have the Monetary Policy Meeting Minutes.
COT data shows that large commercials decreased their net long position from +8,219 to +6,525 last week. We therefore remain SLIGHTLY BULLISH.
 
CNY: There is no data for the CNY this week.
There is no COT data for the CNY.
 
COT data of note on products we regularly comment on in our DAILY REPORTS and WEEKLY BONUS VIDEOS and for those products which show large commercials with extreme net positions.
 
RISK:
S&P500: The S&P500 rose very marginally last week. Large commercials substantially decreased their net short position from -34,932 to -7,684 last week. We therefore alter our view from NEUTRAL to SLIGHTLY BULLISH.
RUSSELL2000: The RUSSELL2000 fell meaningfully last week. Large commercials very significantly decreased their net long position from +28,974 and are now net short -6,888 last week. We therefore alter our view from SLIGHTLY BULLISH to NEUTRAL.
NASDAQ100:The NASDAQ100 fell meaningfully last week. Large commercials increased their net short position from -94,876 to -104,816 last week. We therefore remain BEARISH.
VIX: VIX fell reasonably last week.
Large commercials decreased their protection last week decreasing their net long position from +133,624 to +131,539. This is very close to a 52 week extreme so remain BULLISH on risk protection and BEARISH on risk.
 
COMMODITIES:
GOLD: GOLD fell sharply last week. Large commercials decreased their net short position from -216,354 to -203,611 last week. Now that large commercials hold a net short position which is higher than 200,000 we are bearish so we remain BEARISH.
SILVER: SILVER fell sharply last week. Large commercials decreased their net short position from -75,624 to -71,913 last week. We therefore remain NEUTRAL.
COPPER: COPPER fell strongly last week. Copper is an important metal as it is a leading indicator for many commodities. Large commercials increased their net short position -13,326 to -20,597 last week. Large commercials generally carry a net neutral position. This is no longer a neutral position. We therefore remain SLIGHTLY BEARISH.
CRUDE OIL: CRUDE fell sharply last week. Large commercials decreased their net short position from -390,819 to -376,005 last week. We therefore remain SLIGHTLY BEARISH.
 
The gold:silver ratio increased from 74.38 to 75.10 indicating silver underperformance last week.

DEBT:
US 30 YEAR BOND: The BOND rose sharply last week. Large commercials sharply increased their net short from -22,407 to -69,888 last week. This is close to a 52 week extreme. We therefore remain BEARISH.
 
OTHER FX:
CAN$: The CAN$ rose strongly against the USD last week. Large commercials slightly decreased their net long position from +105,838 to +98,093 last week. This continues to be close to a 52 week extreme and we therefor eremain VERY BULLISH.
NZD:The NZD rose against the USD last week. Large commercials decreased their net long position from +1,981 and are now net short -2,343 last week. We therefore remain NEUTRAL.
AUD/YEN:The AUD rose strongly in this pair. COT data for the AUD showed a meaningful deterioration for the AUD and a slight deterioration for the YEN last week. This bodes badly for risk in the short term.
 
THOUGHTS FOR NEXT WEEK
The USD continues to fail to make new highs.
This continues to bode well for precious metals in the medium to long term.
Not too many changes this week. So we remain of the view similarly to last week that:
precious metals are most vulnerable at this stage.
both GBP and EURO should move lower and start the corrective move lower in the precious metals.
Nothing much has changed.
 
Therefore our recommendations for next week are:
Retain shorts in precious metals.
Begin to take profits on risk long positions.
Begin to buy VIX on any dips towards 10.
Remain short both the EURO and GBP.
 
For timely, accurate trade signals follow our STTS service.

For those who want to join the lucky ones receiving real time, accurate and 100% honest and transparent trade signals visit and subscribe here.

Stay nimble. Good luck trading.
 

CHECK OUR INTERACTIVE ECONOMIC CALENDAR FOR FULL LIST OF UPCOMING DATA RELEASES

DISCLAIMER
The information contained in this publication is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Users acknowledge and agree to the fact that, by its very nature, any investment in CFDs and similar and assimilated products is characterised by a certain degree of uncertainty and that, consequently, any investment of this nature involves risks for which the user is solely responsible and liable.
Any recommendation, opinion or advice contained in such material reflects the views of TFF, and TFF expressly disclaims any responsibility for any decisions or for the suitability of any security or transaction based on it. Specifically, any decisions you may make to buy, sell or hold a security based on such research will be entirely your own and not in any way deemed to be endorsed or influenced by or attributed to TFF.
Past performance should not be seen as an indication of future performance. Market and exchange rate movements may cause the value of your investment to rise or fall and an investor may not get back the amount invested.
Investors considering opening a self-trading account should limit their exposure to maximum 10% of their investment capital.
Investments are not obligations of, deposits in, insured or guaranteed by TFF.