Friday, October 22, 2010

Leveraged Money Flows In The Dollar Will Setup the Next Gold Advance

Gold, silver, and equities will to mark time as the U.S. dollar bounces after heavy selling. This technical bounce was no accident as "connected money" had begun positioning for a counter trend rally in early October. A bullish setup, a closing above the 80 percentile, was confirmed on October 5th. This is revealed in the chart below. A reversal of money flows from buying weakness to selling strength will mark the second leg down of the September 2010 down wave. When the money has been repositioned, silver and gold will lead the way higher once the weak hands have been cast off.

U.S. Dollar Index and the Commercial Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest:

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