Peek Into Future Through Futures, How Hedge Funds Are Positioned - Tuesday, Dec. 29

Gold: Currently net long 278.2k, up 6.6k.

On Monday last week, $1,920s was not quite tested but it came close. Gold ($1,880.40/ounce) posted an intraday high of $1,912 in that session before reversing sharply lower. This level holds special significance in that this is where the metal peaked in September 2011.

After bottoming at $1,450.90 intraday in March, gold went on to surpass $1,920s in July this year, subsequently reaching $2,089.20 on August 7. Since that record high, gold bugs have struggled to recapture $1,920s even as they have managed to defend $1,850s, including Monday last week.

So, the grind continues. As things stand, a falling trend line from the August high gets tested at $1,900. Bulls will have to clear this hurdle before attempting to reclaim $1,920s.

Amidst this, non-commercials have raised net longs in gold futures to a 39-week high.

Nasdaq 100 index (mini): Currently net long 31.2k, up 19.2k.

On September 2, the Nasdaq 100 retreated after posting an intraday high of 12439.48. On Monday last week, bids showed up just above this level, which at the time also approximated the 20-day. One session before that, the index (12838.86) tagged a new intraday high of 12793.47 but bulls were unable to hang on to the gains, in the end producing a potentially bearish hanging man. From their perspective, the good thing is that the pattern did not complete.

This Monday, in a low-volume session indicating a lack of sellers more than an abundance of enthusiastic buyers, the index went on to post a new intraday high of 12861.91. Nearest support lies at 12650s.

Russell 2000 mini-index: Currently net long 16.8k, up 993.

The energizer bunny that the Russell 2000 has become keeps marching on. Having more than doubled since March, the small-cap index has particularly gone ballistic since bottoming at 1530s late October/early November, although the move has come in a classic stair-step fashion.

Along the way, 1600-plus fell first, in early November. This has been an important price level since January 2018. Then, in the middle of last month, fell 1740s, which is where the Russell 2000 peaked back in August that year.

Investors have gravitated toward the sector in the wake of the November 3 presidential election and particularly after PFE and Moderna (MRNA) delivered positive vaccine news. Last Wednesday, the Russell 2000 was 34.7 percent from its 200-day – a new record. Conditions are way overbought. It increasingly feels like the trade is getting crowded – but no sign of major distribution just yet. Although bulls on Monday were probably not happy with the way the index rallied to a new intraday all-time high of 2026.24 but only to close 0.4 percent lower to 1996.25. The nearest support lies in 1920s, which approximate the 20-day.

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This blog is not intended to be, nor shall it be construed as, investment advice.  Neither the information nor any opinion expressed here constitutes an offer to buy or sell any security or ...

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