COT Analysis 12. September XAU/USD

FX:XAUUSD   Gold / U.S. Dollar
612 18 8
We had a lower shorting potential this week but the market did not go up. The COT shorting potential is a very qualitative value for predicting the market direction of the upcoming week. It depends on the relation to the last value.

The so called shorting potential is again the second time lower and the commercials are stocking up their long positions. Addiotionally we have Indian Celebration and Marriage season upcoming.
COT a good track record at predicting future price.

Could you explain COT and how you derive the value?
+1 Reply QuantitativeExhaustion
It's an algorithm which I designed myself. It focuses on the market participants who are mostly influencing the price.

After calculating the strenght of selling interest I place it against the buying interest which gives me this ratio.

Basically a value over 1.00 happens within a downtrend and a value under 1.00 happens in a uptrend.
Current value > last value = downtrend
current value < last value = uptrend

If we can monitor how the value is going down from week to week like in this case, we can see where it will go next. We have a value over 1.00 within this current downtrend but it goes towards 1.00 which means that we could enter a real uptrend which is way more than just a correction wave.

The algorith itself should stay my secret ;)
+3 Reply
Hi interesting and usefull indicator... Did you find on the site here, or its yours...?thanks for your answer
Reply maximus71
I designed it myself. It is in the testing phase but it shows nice results.
+1 Reply
Interesting man! But the charts are in crash mode! IMHO. Watch a monthly chart!
Reply BuddySavdb
The COT values are for weekly trading. Therefore the monthy technical situation does not influence its function.
+1 Reply
For me your cot indicator should be right....i mean 20 $ upside and dann down again...any way we will see it next very interested in your indicator, tell me when it will be available, thanks for all your work...
+1 Reply
nezyrinfx maximus71
that's is what i got too. 1240 being the new resistence now.
I'm pretty sure that the gold prices to fall to @ 1181.45 usd
QuantitativeExhaustion DraganDrenjanin
Yes and the COT will lag, so it's not always if Friday shows a +/- in COT, you have to look at the possibility of a lag or lead. With a two to three week COT lag we might see a BIG bounce that will damage all these new short traders.
Reply QuantitativeExhaustion
And additionally we have a structure level from 1180-1230 which means that the price does not have to retest 1180. It might turn around within this structure level. One more factor is sentiment low on the level of sentiment of 2000 when gold price was at 300 Dollar and then rushed up. There are lots of hidden factors, fundamental, sentiment, technical factors which are giving hints for a big gold rush.
+1 Reply
Hi, i really hope a bounce... Is it possible 1280 ?thanks for your answer
I'd wait to see what happen next week with the FED. IMO we see a pause and one more dip lower to near 1180.
Reply maximus71
I cannot give a value where it will bounce but im very confident to say that one impulse wave will surely happen upwards. But I cannot say when. Maybe 1230, maybe 1218, maybe 1200 or maybe 1180... everything can happen. But when it happens it will possibly reach 1310
1310 is a bit conservative.
Thanks for your answer, yes Wait and see , im sure too that a bounce is imminent but when and where, thats the question at 1 million $... :)
yes, you don't want to be in early or out early. You want to be just right or nearly right. My mark is 1286/87 and selling over 1440
+1 Reply QuantitativeExhaustion
Yeah 1310 is the highest (and conservative) possibility. Target 1 is 1280.
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