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/
firstname.lastname@example.org Chairman Gensler
email@example.com Commissioner Chilton
firstname.lastname@example.org Commissioner Sommers
Somalia@cftc.gov Commissioner O’Malia
email@example.com Commissioner Wetjen
firstname.lastname@example.org Director Meister
See you next week!