Weekly Fundamentals - 08 July 2017

 
THE WEEK AHEAD FUNDAMENTALLY - KEY DATA TO WATCH OUT FOR
 

In conclusion to our report last week 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.
COT for precious metals continues to improve.
COT for both the AUD and NZD continue to deteriorate.
 
Therefore our recommendations based on our COT readings for next week are as follows:
Continue accumulating precious metals on dips
Continue selling both the AUD and NZD into any further strength
Begin to become wary of the CAN$
Stay away from risk
The USD Index may be due a corrective bounce.”
 
Now let's see how we fared on our recommendations:
We were given a golden opportunity this week to accumulate the precious metals
Selling both the AUD and NZD was a very good call
Being wary of the CAN$ was incorrect
Staying wary of risk was good as we witnessed slight falls
Predicting that the USD Index was due a corrective bounce was correct.
 
A good week.
 
An extremely quiet week in terms of data.
 
USD:The US$ Index closed higher last week.
On Wednesday the FED Chairperson speaks. We also have Crude Oil Inventories.
On Thursday we have PPI expected to remain at 0.0% and the usual Unemployment Claims figure thought to be 244,000 from the previous 248,000. The FED Chairperson speaks again.
On Friday we have both CPI and Core CPI. The former is thought to be 0.1% from the previous -0.1% and the latter 0.2% from 0.1%.
Finally we have both Core Retail sales and Retail sales. Both are anticipated to rise from -0.3% to 0.2%.
COT data shows that large commercials very slightly increased their net short position in the US$ Index from -10,534 to -10,699. We therefore remain NEUTRAL.
 
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 increased their net short position last week from -75,505 to -100,041. This is now a 52 week low so we alter our view from  BEARISH to VERY BEARISH.
 
GBP:The GBP closed sharply lower against the USD last week.
Only one item for the GBP this week.
On Wednesday we have Average Earnings Index thought to fall from 2.1% to 1.8%.
COT data shows that large commercials significantly decreased their net long position from +43,194 to +24,751 last week. This is now a 52 week low so we alter our view from NEUTRAL t oBEARISH.
 
YEN:The YEN closed sharply lower against the USD last week.
There is no data for the YEN this week.
COT data shows that large commercials increased their net long position from +82,010 to +98,183 last week. This is a 52 week extreme. We therefore remain BULLISH.
 
AUD:The AUD closed sharply lower against the USD last week.
There is no data for the AUD this week.
COT data shows that large commercials significantly increased their net short position from -20,451 to -38,910 last week. We therefore alter our view from SLIGHTLY BEARISH to BEARISH.
 
CNY: Three items for the CNY this week.
On Sunday we expect both CPI and PPI. The former is expected to rise from 1.5% to 1.6% and the latter is expected to remain static at 5.5%.
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 fell slightly last week. Large commercials substantially decreased their net long position from +17,979 and are now net short -26,227. We therefore alter our view from SLIGHTLY BULLISH to SLIGHTLY BEARISH.
RUSSELL2000: The RUSSELL2000 fell slightly last week. Large commercials slightly increased their net long position from +8,243 to +8,535 last week. We therefore remain NEUTRAL.
NASDAQ100:The NASDAQ100 fell slightly last week. Large commercials decreased their net short position from -53,252 to -40,695 last week. We therefore remain BEARISH.
VIX: VIX closed virtually unchanged last week.
Large commercials slightly decreased their protection last week decreasing their net long position from +130,665 to +123,327. This remains 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 -149,863 to -107,226 last week. This is now a 52 week extreme. Now that large commercials hold a net short position which is lower than 200,000 we alter our view from NEUTRAL to SLIGHTLY BULLISH.
SILVER: SILVER fell sharply last week. Large commercials decreased their net short position from -50,208 to -39,228 last week. This is a 52 week extreme. We therefore remain SLIGHTLY BULLISH.
COPPER: COPPER fell sharply last week. Copper is an important metal as it is a leading indicator for many commodities. Large commercials slightly increased their net short position from -15,010 to -17,521 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 marginally last week. It has now fallen for 7 weeks in a row. Large commercials decreased their net short position from -346,338 to -338,146 last week. We therefore remain SLIGHTLY BEARISH.
 
The gold:silver ratio increased from -74.73 to 77.85 indicating substantial silver underperformance last week.

DEBT:
US 30 YEAR BOND: The BOND fell sharply last week. Large commercials decreased their net short from -85,475 to -72,662 last week. We therefore remain BEARISH.
 
OTHER FX:
CAN$: The CAN$ rose strongly against the USD last week. Large commercials substantially decreased their net long position from +63,797 to +32,293 last week. We therefore alter our view from SLIGHTLY BULLISH to SLIGHTLY BEARISH.
NZD:The NZD fell strongly against the USD last week. Large commercials increased their net short position from -26,325 to -31,299 last week. This remains a 52 week extreme and we therefore remain VERY BEARISH.
AUD/YEN:The AUD rose in this pair. COT data for the AUD showed strong deterioration for the AUD and good improvement for the YEN last week. This bodes badly for risk in the short term.
 
THOUGHTS FOR NEXT WEEK
A number of significant COT changes this week.
The USD continues to fail to make new highs.
This continues to bode well for precious metals in the medium to long term.
COT for precious metals improved substantially.
COT data for the commodity backed currencies showed deterioration.
COT data for risk indicates caution.
 
Therefore our recommendations based on our COT readings for next week are as follows:
Continue accumulating precious metals on dips
Continue selling the AUD and NZD into any strength
Sell the CAN $
Sell the GBP
Sell the EURO
Stay away from risk
The USD Index may continue to experience a corrective bounce.
 
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