Submitted by SD Contributor Marshall Swing:

Silver COT Report 9/21/12:

Commercials sold 322 longs on the week and purchased 2,880 shorts to end the week with 44.97% of all open interest, a significant decrease of 1.17% in their share since last week, and now stand as a group at 252,370,000 ounces net short, another massive increase of 16,000,000 net short ounces from the previous week. 

 

 

Large speculators resumed long buying snatching 1,834 longs while adding -761 short contracts increasing their net long position to 162,775,000 ounces, an increase in their net long position of over 5,000,000 ounces from the prior week.

 

Small speculators continued massive long purchases adding 2,705 longs and a smallish 576 shorts for a net long position of 89,595,000 ounces an increase of over 10,000,000 ounces net long from the prior week.

 

The commercial’s producer merchant traders decreased their net short position by almost 50,000,000 ounces this period.  This is the most significant change in open interest in quite some time.  Almost…!  Read on…

 

There were two significant short coverings last period, one on Wednesday and then the following smaller effort on Monday.  In terms of contracts traded, the Wednesday short covering expended more than twice as many trades.

 

For the first time in over a month we have seen significant volatility in the silver price.  Until this past period, price had been up, up, and away but now we see some idea of where the commercials have drawn a line in the sand and that appears around the $34.60 price as last Friday’s close and today’s close were essentially the same price with quite some volatility up and down in between those closes.

 

Do the producer merchants work in tandem with the swap dealers?

 

If ever there were a clear case for manipulation it is the numbers from this week as the producer merchant covered -12,618 shorts and the swap dealer purchased 11,681 shorts.  They are virtual mirror images of one another.  The aggregated numbers of the commercials are very in line with the speculators and do not stand out but these numbers in the disaggregated commercials tell the story!

 

Can you spell manipulation?

 

Last week the swap dealers were over 25,000,000 ounces net long.  This week they are over -39,000,000 ounces net short.

 

That is a change in one week of 54,000,000 ounces net short.

 

In other words, the swap dealers picked up virtually all of the short position discarded by the producer merchant!!

 

If that is not two different classes of traders operating in tandem then I do not know what is illegal manipulation.

 

As always, 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 lines: 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

 

See you next week!

 

Marshall

  1. Its getting away from them or its planned this way, who knows.   I think for a major bull leg to start the shorts must be broken and so far it appears at this point someone is selling a bit more than they can deliver?
     
    Its not the top of this move yet for sure.   Maybe a couple weeks imo
     
     

  2. Great and powerful OZ, the scam has been figured out.  The manipulation is too obvious.  Shows extreme desperation to lash out at the longs to try and scare them back, but it is just making the longs smell blood in the water.  If you want want to scare someone it has to work, if not, it emboldens you opposition.

  3. The TREND IS YOUR FRIEND. I can’t see the commercials bucking this trend up without some sort of government guarentee against almost certain massive losses! Who else but government with their ability to print, barrow and then steal could give such a guarentee?

  4. Are the commercials still buying a lot of paper silver shorts even if silver is now low? It looks like that silver will go higher pretty soon even if its price was crushed by the cartel recently. By the way, I think that the cartel’s raid wasn’t so bad. :)

  5. We’ve seen this a hundred times before. They (bullion banks) pull the bids and run the stops. You know the drill and the results. Cascading waterfall declines.

    Playing the paper games in precious metals in absolute madness. That includes the ETF’s too. I suppose some PM funds are legit like CEF, but I wouldnt even own those anymore either. And having talked to Turk’s people directly, I can tell you that there is counterparty risk even with his operation (Goldmoney).  

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