Commitment Of Traders, Futures And Hedge Fund Positions, Sunday Jan. 24

Despite the prevailing ‘this time is different’ attitude, which historically has always come back to bite them in the rear, bulls have done a good job of defending support. Last month, they quickly stepped up to defend 3640s. On November 9 when Pfizer (PFE) announced its positive vaccine news and stocks rallied, the large cap index reversed to close 95 points lower from the intraday high of 3645.99. Bulls deserve the benefit of the doubt as long as 3640s is intact, which is 200 points lower from here.

Euro: Currently net long 163.5k, up 7.6k.

On Thursday, as widely anticipated, the ECB left its interest rates unchanged. President Christine Lagarde stressed on the need to become flexible, stating that the €1.85-trillion pandemic emergency purchase program may not be fully used but also saying it can be equally recalibrated should the need arise. Markets latched on to the first comment and rallied the euro ($1.2175) 0.5 percent in that session.

Leading up to this, in Wednesday’s doji session, the currency tagged the 50-day. Tuesday produced a doji as well.

On the 6th, the euro tagged $1.2345 intraday before reversing. The resistance-turned-support at $1.20-$1.21 was not quite tested, but this was a first test of the 50-day in the past couple of months and it held. Bulls’ real test will be if they can take out $1.2170s. Non-commercials are betting this happens.

Gold: Currently net long 246.6k, up 411.

On Tuesday, bids showed up well ahead of a test of straight-line support at $1,760s-$1,770s, as gold ($1,856.20/ounce) tagged $1,800.80 intraday, leaving behind a long lower shadow. In the next session, the 200-day ($1,848.90) was recaptured.

For the metal to proceed toward testing crucial $1,920s, which is where gold peaked in September 2011, it first needs to take care of trend-line resistance from early August. This was tested – unsuccessfully. Inability to reclaim this trend line raises the odds the descending triangle gold finds itself in completes in due course, meaning the risk is to the downside. It currently sits right on that support.

Nasdaq 100 index (mini): Currently net long 31.6k, up 11.2k.

Tech investors rallied the Nasdaq 100 4.4 percent this week positioning for December-quarter results from tech bigwigs the next couple of weeks. This follows a weekly hanging man from two weeks ago, which the bears – once again – were unable to capitalize on. On Thursday, the index tagged a new intraday all-time high of 13433.69.

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