Latest Commitment Of Traders Report - Noncommercial Positions

Euro: Currently net long 139.9k, up 1.6k.

Euro bulls built this week on last week’s weekly hammer. The currency rallied 1.4 percent this week, breaking out of major resistance at $1.19-$1.20. This ceiling goes back to May 2003. Bulls hammered on this for four months before it gave way. The dollar’s plight helped, as the euro makes up 57.6 percent of the US dollar index.

Once $1.19-$1.20 fell, the euro ($1.2122) quickly rallied to test the next level of resistance at $1.21-$1.22. Thursday’s intraday high was $1.2175. The daily is way overbought. In the event bulls are able to clear this hurdle as well, they will soon be eyeing $1.25. Before that happens, they may very well have to defend a retest of this week’s breakout.

Gold: Currently net long 260.3k, up 16.4k.

After having lost one after another support since peaking at $2,089.20 on August 7, gold bugs defended horizontal support at $1,750s this week. Monday, gold ($1,840/ounce) printed an intraday low of $1,767.20 before bulls put their foot down. The 200-day moving average was recaptured in the very next session. By Friday, $1,850s, which was lost two weeks ago, was tested; bulls need to reclaim this level before the 50-day ($1,882.93), followed by $1,920s, is tested.

Amidst this, non-commercials raised net longs to a 19-week high.

Flows, however, which at one time acted as a strong tailwind, are turning into a headwind. In the week to Wednesday, GLD (SPDR Gold ETF) lost $198 million and IAU (iShares Gold Trust) $289 million (courtesy of ETF.com). This was GLD’s seventh straight weekly outflows, for redemptions totaling $5.2 billion. The ETF is still up $14.7 billion since late March. Gold bottomed back then at $1,450.90, meaning longs have tons of profit on paper. In those 37 weeks, IAU had three weekly outflows, for a total haul of $8.2 billion.

Nasdaq 100 index (mini): Currently net short 22.6k, down 175.

On September 2, the Nasdaq 100 rallied to 12439.48 intraday but also formed a hanging man. For the next three months, the index essentially went sideways. Rally attempts were repeatedly denied at 12200-12300.

Monday, the index (12528.48) posted a new high of 12510.02, which was then eclipsed on Thursday when 12538.92 was hit intraday. Amidst all these highs, conviction is lacking. The daily is overbought. Tech bulls cannot afford to lose the aforementioned support, which now approximates the 10-day.

Russell 2000 mini-index: Currently net long 38.6k, down 8.1k.

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