Friday, 15 June 2007

"Bullish" Signal for Canadian Gold ETF

A new bullish signal came in this week's Commitments of Traders reports. The "smart money" commercial traders have flipped to a historic extreme of bullishness in gold, giving a "bullish" signal for Canada's Gold iUnits exchange-traded fund (symbol XGD). The commercial traders have been on a "bearish" signal for XGD and the rest of the gold sector since January and February.

Check the "Profit/Loss Results" and "How It Works" links to the right if you're interested in how I trade new signals for this and my other setups. For example, my XGD setup calls for the trade to be executed on the next weekly open (that is, Monday, June 18).

Please keep in mind, though, that this setup's results are based on only six past trades. (That's because the data on XGD goes back only to March 2001.) That means this setup can't yet be validated statistically. In other words, I can't give any confidence level on its future performance. My other gold-related setups came just shy of giving similar "bullish" signals this week, but nothing's been triggered so far, so they remain "bearish" until further notice.

The new XGD bullish signal does, however, look timely since XGD today had a go at a breakout from its recent downtrend. Check here for more analysis of the latest COTs release next Monday or Tuesday.

New Signals*
-S&P/TSE Canadian Gold iUnits ETF, symbol: XGD.TO


Renewed Signals**

-Soybean Oil
-Natural Gas***
-Crude Oil***

Existing signals (date of original signal in parentheses)****

-S&P/TSE Canadian Gold iUnits ETF, symbol: XGD.TO (12-Jun-07)
-30-Year Treasury Yield (3-Jan-07)
-10-Year Treasury Yield (20-Mar-07)
-S&P 500 (20-Mar-07)
-NASDAQ (27-Mar-07)
-Semiconductor Index, symbol: SOX (30-Mar-07)
-Dow Jones Industrial Average (20-Dec-05)
-Russell 2000 (25-Mar-03)
-Nikkei (3-Feb-04)
-TSX (20-Mar-07)

-S&P/TSE Canadian Energy iUnits ETF, symbol: XEG.TO (3-Apr-07)
-Oil Service Holders ETF, symbol: OIH (18-Apr-06)
-Soybean Oil (2-May-06)
-US Global Investors Funds US Gold Fund, USERX (30-Jan-07)
-Gold Bugs Index, HUI (13-Feb-07)
-Canadian Dollar (10-Apr-07)
-U.S. Dollar Index (3-Oct-06)
-Gold (13-Feb-07)
-Copper (10-Apr-07)

-S&P 400 Midcap (3-Jan-07)
-Crude Oil, Light Sweet (3-Apr-07)***
-Natural Gas (27-Mar-07)***
-Silver (21-Nov-06)

* For an explanation of what I do after a new signal, click “How It Works” to the right.
** A “renewed” signal is when a market is already on a bullish or bearish signal, and traders again register an extreme net trading position in the same direction. I normally ignore renewed signals unless I don't already have a trade on in this market. I haven't studied the profitability of trading on renewed signals.
*** See my special caveats for my Crude Oil and Natural Gas setups (click “Profit/Loss Results” to the right and check the footnotes).
**** The date in parentheses is the date of the COTs report that gave this signal - not the date I executed the trade (which can be up to four weeks later). For details on how I trade this system, including trade delays and portfolio allocations, click on "How It Works" and “Profit/Loss Results” to the right. These "existing signals," which are mostly several months old, are listed here as a reference, not a trading recommendation.

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