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Last week there was a move in comm-dolls that suggested that there may be strength as Japanese yen flooded the market looking for yield. Of course that all comes tumbling down – for now – but could that play reemerge?

The RBA is scheduled to release the Meeting Minutes at 9:30pm EST tonight and with the aussie and kiwi taking the brunt of the gold panic, Dow sell-off, and overall risk aversion, is there a chance for the comm-dolls to make a comeback?

The AUD/USD has transitioned in just one session from a fresh uptrend to a choppy market which has all the characteristics of distribution but without the uptrend preceding it!

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This move is the AUD was probably far more damaging that the weakness in the loonie since the USD/CAD was transitional to slightly bullish and still had not begun to clarify an uptrend; expectation of follow-through was lower. The AUD rocked some positions as did the JPY strength is the risk averse environment. Don’t blame gold for the AUD weakness alone because the initial selling came after the slightly weaker-than-expected GBP release (7.7% vs. the expected 8.0). Eventually yes, while there may be a slowdown in China, it does seem to be stabilizing and just like it’ll take a second (confirming) NFP for trades to get concerned about the job picture, it’ll take more than this GDP for traders to really put a lot behind a China slowdown play. Which means that everything just fed on itself to day making a bad day worse.

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Everyone has been asking about gold and my main theme is that gold WAS ALREADY in a meandering downtrend with plenty of bottom pickers between 1600 and 1550.

If you want to check out my full take on gold read this: Last Friday Wasn’t the Beginning of the Gold Short Trade…

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