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Albert Sung is the author of the Katchum Macro-Economic Blog, monitoring breaking economic news from a day to day basis. He started investing in 2008 because of the economic crisis and holds a masters degree in chemical engineering. Previously, he worked several years as a process engineer at... More
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  • How To Make Use Of The Current COT Reports To Predict Price Swings In Silver And Bonds 0 comments
    Jan 18, 2013 1:45 PM | about stocks: AGQ, TLT

    I always thought by myself, how come the COT site doesn't give current charts and current tables here. I mean, those numbers are 2 months old... Because of that, I didn't have current information. But we have a breakthrough here.

    Thanks to Dieuwer from Seekingalpha (and I know you're secretly watching over me), who pointed out I make a lot of mistakes, I now have a very interesting site to share, which most importantly, is current and updated each week. Namely: http://www.cotpricecharts.com/commitmentscurrent/

    On that site, the two most important ones for me are the one for silver/gold and the other for 10 year bonds.

    Gold: http://snalaska.com/cot/current/charts/GC.png

    Silver: http://snalaska.com/cot/current/charts/SI.png

    10 year bonds: http://snalaska.com/cot/current/charts/TY.png

    Let's talk about the silver (~gold) one first. Chart 1 gives us immediately the commercial interest. And we see that today the commercials are pretty short silver. That means that silver will be weak at this time.

    Once the commercials start to become long again (purple chart goes up), like in July of 2012, then you need to start buying silver. And indeed, when you look at the silver price in July 2012, it bottomed out. So this COT site, is a must, to monitor each week.

    (click to enlarge)

    Chart 1: Silver Open Interest



    (click to enlarge)
    Chart 2: Silver price

    As for the 10 year bonds, Chart 3 gives us an idea what the commercials are doing now. They have gone long just recently. You can see the purple chart has gone positive the previous week. How to read this chart? When the purple chart is very positive, with many commercials buying bonds, like in April 2012, then you should buy bonds. When commercials are short, like in October-December 2012, you should sell bonds.

    And it works like candy...



    (click to enlarge)
    Chart 4: 10 Year Treasury Yields

    It's like Dieuwer has just put money in my pocket with these charts!

    Disclosure: I am long AGQ.

    Stocks: AGQ, TLT
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