Mindless wave counting is not what I like to do, so seeing the gold COT report for the first time can be unsettling. Above, the commercials are in a net short position that we haven’t seen since mid-2018. These are bearish signals that very few people read or even consider to be important.
The large speculators have taken the opposite side which is aligned with the majority bullish consensus. Folks, both groups can’t be right at the same time and history has been on the side of the commercial hedgers.
The media always talk about the large speculators who they think are the smart hedge funds. Speculators are the emotional trend chasers and they consistently paint themselves into a corner, where they become trapped.
When the market moves against the speculators you can bet they will run or dump their long positions as fast as they can.
I have another gold COT chart that came from the May 2016 gold peak when commercials were also in a massive short position. Gold also crashed at that time, after which it started a sideways bearish phase.
I still have too many alternates, and I will not post or show alternate wave counts on one chart. All my wave counts are saved on my hard drive for every month and not having many alternates on one chart saves me time in finding any mistakes.
The majority of wave analysts count out hundreds of micro mini wave counts and I always wondered how do they find their mistakes?
The above gold chart could give us a correction down to the bottom trend line after which gold would crank up again as another zigzag.
We also see this weekly chart where gold is far above both moving average lines and many times gold crashed below both averages before a new bullish phase started back up. It would take little for gold to decline and before we know it, gold has created a death cross on the weekly charts.