Monday, July 24, 6:13 pm EST. This JUST in, from the Stansberry folks:
“Earlier this month, we noted that speculative traders – as measured by the U.S government’s weekly Commitments of Traders (“COT”) report – were fleeing from precious metals. As we wrote on July 11.
Net speculative positions have fallen from an all-time record of more than 100,000 contracts this spring to less than 30,000 contracts today. And they’re quickly closing in on levels that have marked important bottoms in the past.
Speculative positions in gold – which didn’t surpass last year’s record this year – have experienced a similar decline.
Again, this doesn’t mean the next rally is imminent… But it suggests we’re finally close to a significant bottom in gold and silver.
Stay patient… Your next great buying opportunity is approaching.
Since then, speculators have continued to unwind their bullish bets. According to the latest COT data, net speculative positions have now plunged to fewer than 10,000 contracts as of last week…
As you can see in the chart, speculators now hold even fewer bullish bets than they did in late 2015, just before the new bull market began. It appears they’re finally throwing in the towel for the first time in nearly a year.
Remember, these traders are known as the ‘dumb money’…
As a group, they tend to be wrong at the extremes. They get super bullish at market tops, and super bearish at market bottoms. So today’s pessimism is a bullish sign for prices going forward.
But that’s not all. As you can see in the next chart, silver prices have begun to diverge over the past few weeks…
The dumb money is giving up, but silver prices have been moving higher, anyway. This, too, is a bullish sign.
Again, as we always say, sentiment is not a precise timing tool. Speculators could become more bearish still, and prices could move lower again in the near term. So don’t back up the truck just yet.
But for the first time since precious metals peaked last summer, we now have the necessary ingredients for a lasting bottom. If you’ve been waiting for a great, low-risk buying opportunity, get ready. It’s likely just around the corner.”
This has my antenna up! I’ll be watching daily to see if such an opportunity, as they just described, should come to fruition shortly. I will certainly hope to see my own timing indicators to reset first, as that would be so awesome to actually be able to call it, just as it might be about to happen. If I get such a signal, and I should learn that they’re calling for the same, at the same time… I’ll be willing to take an aggressive position, and advise you to do the same. Watch!!!
Update 6:26 pm… Of keen interest, most of the miners declined, and on expanding volume. While nearly 10% below the 50-day average volume, it was still considerably greater than the previous 5 up days. The resulting candlestick is a Bearish Engulfing pattern-type. This may be the beginning of that down move that might set-up the next great rally of which the above report is telling us to anticipate… we shall see! Sure hope they’re right and I can generate a signal!!!
Here’s to your accumulation of real wealth!
Harold F Crowell