“A Bloodbath is Believed to be Imminent…” in Ag

I agree with Clive that silver (and to a lesser degree, gold) is set up to take a hit.  In fact, with the CoT data you have seen posted here each Friday you can understand the main reason why NFTRH has been cautious on an otherwise bullish picture for the last few weeks, as the precious metals took the QE Express to over bought and over loved status.

Now, Mr. Maund tends to write in a very declarative and dynamic way.  I prefer the steady approach.  October err… disturbances in the precious metals should be an opportunity from the bull side, not the end of the world.  It is advisable for silver bulls (I am personally far more a gold bull) to have a lot of cash and a list of quality items drawn up, complete with support levels and low-risk buy points.  Meanwhile, silver broke down in pre-US open.  I wonder if Clive is going jump right in or wait for a bounce first.

“On the site we will be looking at ways to capitalize on the expected plunge before trading gets underway tomorrow [10/8].”  –CM

Edit:  Here is how NFTRH put it in the Current Outlook summary table that appears on page 2 each week.  Major downside support levels have been noted for weeks now.  It appears they will provide some nice opportunity this month for all but the sheared sheep that Clive refers to.

Sentiment is over bullish in the precious metals.  Public opinion is over bullish, Hulbert’s HGNSI is over bullish and the CoT data show that the little and big speculators are over bullish.  This should be cleared out before we renew our bullish enthusiasm on a risk vs. reward basis.”

Finally for your viewing pleasure, here is a different view of the silver CoT situation compliments of SentimenTrader.com, with whom I maintain a premium subscription.  It is not pretty.

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