Peeking Into The Future Thru Futures, What Hedge Funds Were Buying This Week

Euro: Currently net long 73.7k, down 19.6k.

After dropping another 0.7 percent through Tuesday’s low of $1.1712, the euro ($1.1778) regained some footing to end the week only down 0.2 percent. In the end, the week formed a potentially bullish hammer.

The currency retreated after posting $1.2345 early this year.

The daily can rally. For now, $1.1840s offers the nearest resistance. This is about where the 200-day ($1.1855) lies as well.

Gold: Currently net long 167.5k, down 6.5k.

In the week through Wednesday, GLD (SPDR Gold ETF) continued to bleed, losing $309 million. In the last 24, this was the 21 weekly outflows for a cumulative loss of $13.9 billion (courtesy of ETF.com). Outflows picked up momentum in the week to October 21 last year.

Back then, bulls and bears were locked into a duel for control of $1,920s. After a last failed attempt at that level early this year, gold bugs gave up. By the 8th last month, gold ($1,728.40/ounce) was testing $1,670s. The rally that followed petered out at $1,750s – just under crucial support-turned-resistance at $1,760s-$1,770s, which was lost at the end of February and which was part of a broken descending triangle.

The metal reached its all-time high of $2,089.20 on August 7 last year, followed by a series of lower highs. If the descending triangle pattern completes, the metal could eventually head toward $1,440s. But before that happens, $1,670s needs to give way – at least. This support was once again tested this week, and once again bulls came through.

A test of $1,760s-$1,770s probably lies ahead. Incidentally, this is where the 50-day ($1,771.93) now lies. A breakout will be a big win for the bulls. At least until Tuesday, non-commercials do not have high hopes, as they cut their net longs to a 22-month low.

Nasdaq 100 index (mini): Currently net short 17.9k, up 5.2k.

Through the 5th, the Nasdaq 100 was down as much as 5.4 percent in March but recovered to end the month up 1.4 percent; as a result, a monthly dragonfly doji formed. This candle shows sellers were aggressive but that the buyers were able to absorb all the selling. But the important thing to remember here is that selling picked up speed. March’s action followed February’s monthly shooting star and January’s long-legged doji. Tech decidedly acts different this year.

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