Across on my Twitter account I’ve been accused of misleading people by saying that the COT numbers are nothing to be scared of. I’m putting a detailed response on here, and I’ll direct them to read it. Somehow I’ve managed to get over 3500 followers in a few months, so I hope it increases awareness of our community here. The limited number of characters on Twitter makes it hard to respond in full. The chart I’ve posted here should make my point pretty well. It boils down to the simple fact (at least, I think it’s simple), that all the chart indicators need to be viewed differently, depending on whether you have a market trending up, down or sideways. The same applies to COT numbers.

I like to keep things simple, it hurts my brain less. For the purposes of this article, forget what you call the lines at the bottom of the gold chart (STOCH, large spec, commercial, whatever), it really doesn’t matter. It’s green lines, blue lines and red lines. Right then. In a bull market, the green line going down from a high reading is NOT a problem. You just get a bullish consolidation followed by new highs. In a bear market, it is a problem – of course it is – it’s a bear market after all (the clue is in the name). I’m being flippant, sorry. Anyway, back to the chart – the blue/red lines at the very bottom – if they are above 50 and dipping down from high values, it’s not a problem. If price has crossed below the moving average (red circle) and we are below 50, it is a problem.

So what am I trying to say ? Well if you’re trying to trade in and out of this market on daily/weekly timescales, then go for it – use the elevated indicators and COT numbers to keep calling for a big drop in price, but just remember that in a bull market, price may rise $200 in the meantime, then only drop $100 whilst the indicators and COT numbers ‘reset’. That’s how a bull market works. If it didn’t do that it wouldn’t be a bull market.

I don’t want to mislead anyone, so I apologise if somehow I have. My tactic (for what it’s worth) is to hold on for dear life and keep an eye on the 2023/24 cyclical low, expecting to see some signs that a consolidation turns into something deeper which violates the supporting averages at the time. I plan to exit ALL my PM miner positions at that point and get in at lower valuations when the 2023/24 low is in (safely in the knowledge) that the biggest part of the bull run into a peak in the late 2020’s ahead of the next major 16 year cycle low in 2032. That’s the plan anyway. I would advise everyone to take advice from multiple sources and read articles and posts from people who have completely the opposite view to yourself – it can be very enlightening. Open minds and lots of collective team work is what this site excels at. Less of the confrontation, plenty of friendly ‘banter’. The world just got a lot more screwed up in the last few days, and the coming years look, well, I’m not sure what the word is…crazy/tumultuous/dangerous/turbulent/challenging/volatile/just plain shit. The charts are starting to point to something not very nice. Global all-time highs in gold are coming at a price. I think we need to be careful what we wish for here. Wishing all here the very best for the future.