Submitted by SD Contributor Marshall Swing

Silver COT Report 5/11/12

Commercials bought a huge 3,032 longs and covered a mild -2,812 shorts to end the week with 47.94% of all open interest and now stand as a group at -89,495,000 ounces net short, a mammoth decrease of almost 20,000,000 ounces net short from the previous week.  I hope you understand what they are doing here.  They intend to go net long at some point in the near future as they know exactly what the future holds.  They will maximize their profit to the fullest.  They will take the price of silver down until they are either net long or fully long and have bought up every speculator long that they can.  It is very important that you review last week’s COT because in it, plus this last Wed – Fri trading days are the key to where the gold price is going and how it is going to get there.

Large speculators picked up 1,153 new longs and covered a mere -4,174 shorts for a net long position of 62,218,000 ounces, a decrease of almost over 15,000,000 ounces from the prior week.  This is because of their heavy short selling (purchasing).  They are blatantly stupid and should contact me immediately for advice at mswing@MarshallSwing.com and a much needed (for them) consulting opportunity for me.   They are so misguided and I am quite sure it is because of following the ILL advice of so many positive writers/commentators in the silver and gold industry.  Those writers/commentators do not understand what is happening right before their very eyes!

Small speculators were smarter and lost -297 longs and oh my goodness purchased a huge 2,526 shorts for a net long position of 26,680,000 ounces an tremendous decrease of over 14,000,000 ounces net long from the prior week.

The commercials are working their way out of their massive short positions they have accumulated, over the years, and those positions are not there for window dressing.  They patently manipulate the silver and gold markets at the benevolence of the CFTC’s full board of commissioners.  The CFTC knows exactly what these producer/merchants are doing to these speculators, right now, killing them, and these commissioners have placed their full blessing upon this rampant destruction of speculator long positions.  I remained absolutely convinced that Bart Chilton is not honest in his wanting to see position limits placed.  none of the other commissioners are honest as well and are pawns of the producer/merchants and the swap dealers.  It must feel really goo0d to be in the same bedroom with them to the rape, pillage, and sack of billions of dollars of speculator’s hard earned cash.  Blythe Master’s is the harlot of Revelation, I believe.  This is as disgusting as it gets.  She was just on CNBC recently and poo pooed JPMorgan’s mammoth short positions as being “hedging”.  She is a rapist par excellante.  Without a peer in her own bank.

For your convenience, if you would like to contact the CFTC and express your views to them, I have provided you their phone numbers and I hope earnestly that you fill up their phone libnes:  http://www.cftc.gov/Contact/index.htm  and email addresses as well:

ggensler@cftc.gov Chairman Gensler

bchilton@cftc.gov Commissioner Chilton

jsommers@cftc.gov Commissioner Sommers

Somalia@cftc.gov Commissioner O’Malia

mwetjen@cftc.gov Commissioner Wetjen

dmeister@cftc.gov Director Meister

How long must the there exist no free market for speculators in the COMEX metals?  How much ill-gotten gain from speculators, at the hands of these producer/merchants, is enough for these commissioners to act and do their jobs to ensure a free market can counter their massive open interest monopolies?

The only way to beat the producer/merchants at their game is to go long and stay long.  Easier said than done when you watch price drop significantly below your buy price, I know.

See you next week!

-Marshall Swing

  1. Your not joking when you say it is hard to hold on to your long positions when you see the price falling every day.

    I just hope the saying ” that it is always darkest just before the dawn ” applies here!
  2. Yes.  I just did the math (how much more silver would I have if I hadn’t spent anything getting into my “position” over the last 4 months), and I’d have been wise to invest in a crystal ball.  By saving all that cash and buying now, I’d instead have about 14% more silver than I do.  Well shit, that does seem like a lot – more than 3 extra coins in each roll of 25 maples…I’d cry, but I don’t want to mess up what’s left of my dry powder…plus I’ll bet some of those numismatic finds would be long gone (like cheap .9999 Grizzlies)
    ;l

  3. Good thoughts Toronto Minnow. But, you know as well as the rest of us you can’t catch the falling knife. I got some a little while ago around $31.00. I’m not crying a bit. Hope to get a little more at these prices.

    Thanks for the info.Marshall. As always, very informative.
  4. If your moving against the majority as far as investments, usually the discomfort is evidence your taking the right action.
    If you have any Silver at all, (in hand that is)
    you are the minority of the population.

    Celebrate! you are rare.

  5. isn’t this what I said yesterday? they are trying in ernest to get the price down to cover then go long. Go long to make up for that 2-3 billion they lost in greece. won’t be long now. the old bernank will announce QE3, they will ride it to 80.00 to 100.00 an ounce then we will see if they can short it again or not. 

  6. 0
    PoppaT May 11, 2012 at 10:50 PM isn’t this what I said yesterday? they are trying in ernest to get the price down to cover then go long. Go long to make up for that 2-3 billion they lost in greece. won’t be long now. the old bernank will announce QE3, they will ride it to 80.00 to 100.00 an ounce then we will see if they can short it again or not. 
     
    Yo PoppaT
     
    your post makes perfect cense ( as in dollars & cense .02 )
     
    the 2-3 billion they lost
     
    is chicken feed compared to what they can make on the long side
     
    they be buttttt stroking J6P 6 ways fron sunday
     
    & he dont have a clue
     
    as a matter of fact
     
    J6P
     
    may say ” sir may I please have another”
     
    as stupid as J6P
     
    IS 
  7. Comex Delivery 5000oz

    Chinese SHFE delivery 30kg = 960oz+ or 1000oz for simple maths
    if 0.1% of the Chinese population take delivery we will need 1.3Billion oz of silver
    what is the world silver production? not much to go around.
    From SHFE”

    Fourth, how do the risk prevention, to ensure the smooth operation of the silver futures?

      A: silver futures research and development and listed on the preparatory process, I always put the risk management top priority. The one hand, the combination of the characteristics of the silver market risk control indicators of scientific settings, silver futures risk control management approach, a more stringent regulations; the other hand, will strengthen the first-line supervision of the silver futures market, and strengthen the education of investors’ risk crack down on illegal activities, maintain good trade order.

      Same time, I will further strengthen the functions of the first-line supervision, in line with the timely detection, and promptly stopped, and timely investigation of the “time” principle, to crack down on illegal activities, maintain good trading order. Currently, I have been equipped with monitoring personnel do people stare varieties found in real-time monitoring of unusual transactions, knock, actual control between account transactions, false trading, super-position, and other violations, according to exchange rules to give timely treatment; market potential key risks to be timely detection, tracking, analysis, assessment and early warning, and resolutely put an end to price-fixing behavior that may occur. When the market may be a greater risk, early development of risk response plans, and actively prevent market risk, and earnestly safeguard the operation of the market order.


    The introduction of silver futures trading in China, to provide investors with a standardized and efficient market to meet participants’ investment, hedging and risk management needs. Before China’s legitimate silver futures market, leading to some investment and a hedge demand for businesses or individuals are attracted to illegal trading in illegally in the electronics market, not only the rights and interests have been damaged, and also seriously disrupted the normal order of the silver market . Late last year, the state has adopted the State Council decided to “straighten out all types of trading venues to effectively guard against financial risks to regulate commodity market place, in this context, the introduction of silver futures will play its due role.

    China Citic Bank seems to be always the first of many Chinese banks to capitalize on new things. Some other banks offer Gold trading and Gold Delivery. 

    http://futures.ecitic.com/market-ins_en.php?tbmarketkindid=4&tbmarketid=11&tbmarketlistid=103

    Minimum delivery 30kg

    With SHFE rolling out, Chinese small investors can use RMB to buy Silver, in turn the GOV need to import more Silver to cope with Demand. Why do they want to do that? So that they can use this excuse to “LOWER their TRADE surplus” + they also can throw away the trillions in US dollars in exchange for real MONEY. 

  8. Crash JPM,

    Great article. Seems though it will still be a paper market. Indeed the Chinese will drive the silver price up, but, to their own ends. It will be good for a while but knowing China, the manipulation will (IMO) eventually become heavily manipulated again. However, as the SHFE grows larger, I do suspect a large number of people will get interested in phyzz and start stacking. What will this do to the price? Who knows. I think you’re on an uncertain track but a most likely scenario. Thanks for the post and stack on.

    Keiser or Keiser clone???? LOL. Have a great day.

  9. We have to start a fire storm and crash JPMorgan, I agree.

    It is up to everyone to make quick phone calls to the CFTC.

    Cut and paste together a letter to them to each individual commissioner!

    I will be providing tools for just such actions very soon but in the mean time MAKE YOUR VOICE HEARD!

  10. 2 Oz LOL, keiser Clone maybe i am.

    I would like to make a point or two after reading so much.
    Perhaps the price discovery mechanism like 
    To affect the spot price: 
    Paper > futures > Spot price > premium + spot price(physical)
    Buying from dealer or stores or from the mints
    = Paper > Premium + spot price <— the only way this can affect the spot price is depending on the dealer who is selling to retail customers.
    As dealer could have two choice for their bullion source when their inventory is down buy and take delivery from futures market or buy from the source the mining companies. This method will slow the physical from entering the bullion banks. it may sound good, for the dealer as they can get better price directly from the source.
    If from the normal way. Bullion from mining > bullion banks > futures market > practice fractional delivery quota (the normal trade 100 times over physical) In order to create a havoc or run on the bank is to take delivery. However Comex is smart in order for the players to practice fractional delivery quota, they made their contract size 5000oz, no retail investors in the right mind will take delivery of 160kg of silver(where are you going to put it( under the bed)?
    The Chinese empower the small investors with 30kg delivery (not too big for retail to take delivery(just like buying a bag of 30kg rice)) to be in the business of affect the price in the futures market therefore creating a spot price and will in turn slowly the price discovery mechanism kick in once Yuan is more internationally traded.
    For now it is merely a slow start surely a good start.
    My educated guess is that, since JPM case of $2billion losses, they might get the gov to bail them out, in that case they could have a window of opp to cover their silver shorts booking the “losses” to the London whale losses. They have this chance now they better use it to ensure the firms survival before the Chinese start taking delivery. 
  11. Very good Crash JP,

    I can see your points. It’s good to have more people posting here. It increases the overall knowledge for all of us and makes for good advertising that may reach more people and wake them up. As far as the JPM 2 billion, for now it’s just a drop in the bucket and they shouldn’t need a gov. bail. If it comes to light there is more to this story and exposure is greater due to the European crisis, they may have to be bailed. This is just one more reason for Ben to take notice and have an added excuse to QE.

    You’re right about storing 5,000oz. of silver. Most people don’t want to but if they get burned enough by JP they could start to change their mind. On top of that, when the SHFE cranks up and the average China man/woman starts a little stack (there’s a bunch of them) it could get real interesting real fast. Bypassing the COMEX may get to be routine for jewelry makers, solar panel manufacturers, etc. We’ll see.

  12. Great data on how the China exchange could affect silver prices and trading.  China is the largest producer of silver and now the second largest importer of same.  That great sucking sound is the noise of silver flying to the east, along with gold.  For centuries silver has been China’s preferred metal.  The west, and particularly Britain, stole a significant amount of China’s silver using opium to addict Chinese, demanding payment in silver.   GB bought so much China goods that a large portion of their sterling ended up in China.    Kind of like the USD buying cheap Chinese stuff. 

     Now China is using FRNs to buy up the same commodities that were looted from them by the British and Japanese stole from them.  The Chinese are really steamed at this situation and are not going to get caught with their silver pants down again. 

    On another note, China says NO to buying European Sov debt.  They said they would help in other ways.  Like buying up  European gold, silver and valuable commodities at Craiglist prices.  Unless the Europeans learn to speak Mandarin,  they won’t  be fit to serve as the maids for the Chinese   China is buying 3 US Banks, including a middle sized eastern US bank.  If there is any other  reason to buy silver, you don’t want to end up working for Whoo Chee Chong cleaning his bathrooms.  Silver rules!

  13. This broad­cast is dated Septem­ber 2009, noth­ing new but some­thing to
    se­ri­ous­ly pon­der over. Sil­ver price is poise to rise
    dra­mat­i­cal­ly. Why? Prior year 2002, the pri­vate own­er­ship of gold
    was pro­hib­it­ed in China but since early 2009, the Chi­nese
    gov­ern­ment has been pro­mot­ing ag­gres­sive­ly the own­er­ship of
    sil­ver and gold to its cit­i­zens through China’s Cen­tral
    Tele­vi­sion, the main state-owned tele­vi­sion com­pa­ny. Lo­cals can
    buy sil­ver bul­lion or gold bars at any Chi­nese bank in four
    dif­fer­ent sizes Why is the gov­ern­ment doing this? What is their
    agen­da? Pon­der over this – The glob­al an­nu­al mine pro­duc­tion for
    sil­ver stands at 860 mil­lion ounces. Pop­u­la­tion of China is 1.3
    Bil­lion. Even if half, 650 mil­lion, were to buy a min­i­mum of one
    ounce every month, that is enough to cause a price in­crease. If the
    Chi­nese cit­i­zens are in­deed be­gin­ning to buy gold and sil­ver,
    then this has to be a strong in­di­ca­tion that prices are going to rise
    dra­mat­i­cal­ly in the rel­a­tive­ly near fu­ture. China is the only
    coun­try in the world now that pro­motes gold and sil­ver to their
    cit­i­zens.

  14. 10-4 on that  China is the number 1 absorber of silver.   when they suck the well dry and that might take a year or two, the world will change and not for the better.  Even stackers who might see prices in low triple digits will be staggered by the implications of silver and gold shortages due to the Eastward march of phyzz.  Our dollar will lose its reserve status and that is not something we want to see.  But no one in our banking or governmental industries will get on board  and that will spell the end to the USA as we know it.  Jim Willie expounds of this at length and he is not optimistic.  But he lives in Costa Rica and that is a pretty good safe harbor from which to talk about these issues. 

Leave a Reply