Recent Extreme Readings In The COT Data…Similar To Seen In Gold

The Copper, Cotton and Crude Oil markets have recently registered COT numbers at multi-year extremes. The prices subsequently broke out to new highs, but failed to gain any traction. This is similar to what was seen in gold price last summer. A violation of the support lines will likely result in a domino of selling pressure.

Conversely, the US Treasury market numbers are very bullish. The weekly bond chart (see following page) has a bullish divergence in the MACD and RSI. This comes after a downside Capitulation in December. Note that each of the eleven times T-Bonds have been to the bottom of the 36-year channel the minimum rally has been 10 points ( ), providing a target of 156+ within the next two months.

If these false breakouts (through the blue lines) are followed by violations of the red lines we should see an acceleration of the moves similar to gold’s move to $1125 in December. (CHARTWORKS – 3/26/2017 2 CHARTWORKS – 3/26/2017 3)

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