Weekly Fundamentals - 21 July 2017

 
THE WEEK AHEAD FUNDAMENTALLY - KEY DATA TO WATCH OUT FOR
 
 
 
In conclusion to our report last week we wrote:
“A number of 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 continue to improve.
COT data for the commodity backed currencies continue to show 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”
 
Now let's see how we fared on our recommendations:
Accumulating precious metals was an excellent call
Selling the above currencies against the USD was given another great opportunity last week
Staying awake from risk was incorrect.
 
Another very average week.
 
A quiet week in terms of data.
 
USD:The US$ Index closed sharply lower last week.
On Tuesday we have Consumer Confidence expected to fall from 118.9 to 116.2.
On Wednesday we start with Crude Oil Inventories. This is followed by the important FOMC Statement and the FED Funds Rate expected to remain at 1.25%.
On Thursday we have Core Durable Goods Orders thought to rise from 0.3% to 0.4%. This is followed by the usual Unemployment Claims figure estimated at 242,000 from the previous 233,000.
Finally on Friday we have the GDP number anticipated to make a strong rise from 1.4% to 2.5%.
COT data shows that large commercials slightly increased their net short position in the US$ Index from -6,954 to -7,011. This is close to a 52 week extreme so we therefore remain SLIGHTLY BULLISH.
 
EURO:The EURO closed sharply higher 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 -108,005 to -118,452. This is a 52 week low so we remain VERY BEARISH.
 
GBP:The GBP fell sharply against the USD last week.
Only one item for the GBP which is the GDP number on Wednesday expected to be 0.3% from the previous 0.2%.
COT data shows that large commercials decreased their net long position from +22,994 to +13,803 last week. This continues to be a 52 week low so we remain BEARISH.
 
YEN:The YEN closed sharply higher 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 +133,152 to +147,646 last week. This continues to be a 52 week extreme. We therefore remain BULLISH.
 
AUD:The AUD closed very sharply higher against the USD last week.
Three items for the AUD this week all on Tuesday.
We start with CPI expected to fall from 0.5% to 0.4%. This is followed by the Trimmed Mean CPI which measures changes in the price of goods and services purchased by consumers, excluding the most volatile 30% of items and is expected to remain at 0.5%. lastly the RBA Governor speaks.
COT data shows that large commercials increased their net short position from -41,966 to -62,449 last week. We therefore remainto BEARISH.
 
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 slightly higher last week. Large commercials decreased their net short position from -28,697 to -19,363. We therefore remain SLIGHTLY BEARISH.
RUSSELL2000: The RUSSELL2000 closed slightly higher last week. Large commercials slightly decreased their net long position from +8,535 to +8243. We therefore remain NEUTRAL.
NASDAQ100:The NASDAQ100 closed sharply higher last week. Large commercials increased their net short position from -24,806 to -31,885 last week. We therefore remain SLIGHTLY BEARISH.
VIX: VIX closed sharply lower last week closing on its lows.
Large commercials increased their protection last week increasing their net long position from +112,696 to +139,931. This is now a 52 week extreme so remain BULLISH on risk protection and BEARISH on risk.
 
COMMODITIES:
GOLD: GOLD rose sharply last week. Large commercials very slightly decreased their net short position from -73,916 to -73,635 last week. This is a 52 week extreme. Now that large commercials hold a net short position which is lower than 200,000 and it is at a 52 week extreme we remain VERY BULLISH.
SILVER: SILVER rose sharply last week. Large commercials decreased their net short position from -24,567 to -21,914 last week. This is a 52 week extreme. We remain VERY BULLISH.
COPPER: COPPER rose reasonably last week. Copper is an important metal as it is a leading indicator for many commodities. Large commercials increased their net short position from -14,901 to -17,580 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 rose slightly last week. Large commercials increased their net short position from -361,371 to -398,320 last week. We therefore remain SLIGHTLY BEARISH.
 
The gold:silver ratio decreased from 76.98 to 76.03 indicating slight silver outperformance last week.

DEBT:
US 30 YEAR BOND: The BOND rose sharply last week. Large commercials substantially decreased their net short from -72,662 to -34,353 last week. We therefore alter our view from BEARISH to SLIGHTLY BEARISH.
 
OTHER FX:
CAN$: The CAN$ rose very strongly against the USD last week. Large commercials decreased their net short position from -28,319 to -22,327 last week. We therefore remain BEARISH.
NZD:The NZD rose strongly against the USD last week. Large commercials increased their net short position from -33,355 to -38,120 last week. This remains a 52 week extreme and we therefore remain VERY BEARISH.
AUD/YEN:The AUD closed lower in this pair. COT data for the AUD showed marked 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
No changes in COT data this week so therefore our thoughts from last week remain intact.
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 continue to improve.
COT data for the commodity backed currencies continue to show 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
 
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