Because I want to look around as many corners as possible (without donning the tin foil hat), I had a thought that is at odds with the view that the bear phase will resume/continue. It is also at odds with a bullish view of gold for the near-term.
So please consider it a mental exercise, the likes of which can be healthy if we keep these things in perspective and in their proper place in the probabilities tool box.
Note Tom McCellan’s post published at Biiwii, showing the strenuously short positions of commercial traders against long-term Treasury bonds. Now consider the bearish Commitments of Traders we have noted for some time now in gold.
What were gold and T bonds in January and February? They were risk ‘off’ liquidity destinations. They are heavily shorted against by supposed ‘smart’ money now. So all I am saying is that these are the financial markets and anything is possible, especially given the propensity for increasingly aggressive policy makers to get involved.
Is there a chance that the CoT structures in T bonds and gold are in preparation for a surprise of some kind? Or maybe in preparation for the stock market to go up simply because that is what it is going to do? They are questions to ask at least.
That is really all I am doing with this update. Thinking aloud and noting a curious situation.