COT: Silver Shorts Cover, Gold Specs Add:
-by Doug P.
Silver
- Large Speculators: the volumes are light, but the ratio is worth mentioning. Those covering shorts accounted for 2805 contracts while those getting long were a mere 835. This obviously smacks of short-covering rally. More so because it happened on the heels of the Brexit vote, and after Gold rallied. Almost like some fund had bigger things to worry about. And then after that, took care of their Silver exposure.
- Small Specs: accounted for 1759 lots of short covering, while adding no longs
- Commercials: added 6100 shorts while adding 835 longs.
Silver Weekly Chart with Open Interest
Silver Comments:
- Open Interest: up in a rally is generally bullish. Up near all time highs is not- Neutral
- Speculators: were covering shorts. This was not a greed fueled rally, more of a fear based one. - Slightly Bullish
- Commercials: their sell/buy ratio was 6 to 1. Whereas the Commercial open interest is 3 to 1. Commercials are leaning into this- Bearish
What does it mean?
- We just ended the first half of the year. This is not insignficant as funds have to report to investors, and could have been the main driver behind Silver's late-to-the-party but hogging-the-dance-floor behaviour. End of Q2, End of 1st half. Short funds closing trades. Maybe a fund blew up. Wouldn't be the first time.
- If you look at open interest and see that longs and shorts are at an extreme, it should give you pause. But when fresh money is investing in the market, traders often see slow stochastics bounce off 100% for weeks. That indicator is meaningless when it does that because it has not digested the fresh money: The "New Normal" so to speak.
- the report does not have the 3 biggest days in it.
- Bill Cinton bought some Silver for AG Loretta Lynch's grandkids?- Doug P.
If this trend continued for the rest of the week, then we have a bonafide short squeeze. We dont neccesarily see anyone forcing a squeeze yet. That doesn't mean they didn't. The market is not as transparent as people would have you believe.
But we'd speculate that funds with losses in other areas started to liquidate their silver shorts after their bigger issues were alleviated. And as a percentage of their caputal at risk werent' as price sensitive as they were in need of reducing margin. They could have had a Gold/ Silver spread on. Again just speculating. But if we were long Gold and short silver, and the position worked for us right after brexit, we'd be inclined to lift our short position in the hopes of driving Gold higher and generating sell liquidity.
For us, the technicals are bullish. Cash Flows are bullish as both large and small specs are covering. The bear side is commercials are not afraid. . Sounds like pull backs above 1800 can be bought. That is not a recommendation. That is a risk reward. If you are trading, think for yourself. Open interest went up 5700 contracts, new sellers on the commercial side. We call that "weak hands to strong hands behavior". It means the funds covered shorts, while their deeperpocketed commercial players sold into the rally. So bullish now bearish later. One source we trust actively in Silver for 30 years said "this smells like the beginning". That said, we both laugh at how we sold our stock positions in 2009. So take it for what it's worth.
Even Though the COT report comes out on Jul1, its is accurate through Tuesday June 28th. So the biggest 3 day move Silver has had in some time is not reflected in the report here.
Kitco Gold Survey Says Gold to Keep Gains
Silver COT Report: Futures
Large Speculators
Commercial
Long
Short
Spreading
Long
Short
107,555
23,894
22,274
56,671
151,872
613
-2,805
3,948
835
6,100
Traders
100
54
40
41
45
Small Speculators
Open Interest
Total
Long
Short
211,396
Long
Short
24,896
13,356
186,500
198,040
382
-1,465
5,778
5,396
7,243
non reportable positions
Positions as of:
162
124
Tuesday, June 28, 2016
© SilverSeek.com
Silver COT Report: Futures & Options Combined
Large Speculators
Commercial
Long
Short
Spreading
Long
Short
108,256
22,439
35,322
62,686
160,651
1,803
-1,903
-1,571
-1,149
4,315
Traders
109
56
61
49
47
Small Speculators
Open Interest
Total
Long
Short
232,748
Long
Short
26,484
14,335
206,264
218,413
-1
-1,759
-918
-917
841
non reportable positions
Positions as of:
184
144
Tuesday, June 28, 2016
© SilverS
FULL REPORT
Traders' Commitments
This report, from the Commodity Futures Trading Commission, is updated weekly and released on Friday afternoon. The CFTC requires any person or firm trading a certain number of contracts to report that trading. The number of contracts that triggers the reporting requirement varies by commodity. A commercial hedger is a large trader who also deals in the commodity on a cash basis. A large speculator is a non-commercial trader who has no dealings in the underlying commodity. The number of contracts traded by small traders is derived by subtracting the positions of larger traders and commercial hedgers from the total of all positions.
June 28, 2016
Number of Contracts and Changes from Previous Week
Contract/Category
Long
Long Chg.
Short
Short Chg.
Copper
Large Speculator
53,692
-10,147
73,506
-23,259
Commercial Hedger
83,357
-12,428
60,873
-427
Small Trader
12,651
-3,357
15,321
-2,246
Corn
Large Speculator
440,231
-69,546
151,116
-29,776
Commercial Hedger
598,307
-46,460
811,251
-70,154
Small Trader
121,930
-2,431
198,101
-18,507
Crude Oil
Large Speculator
510,395
-4,832
206,156
9,524
Commercial Hedger
600,141
12,646
907,925
2,849
Small Trader
91,896
1,661
88,351
-2,898
Eurodollars
Large Speculator
1,296,697
15,604
1,292,758
-170,656
Commercial Hedger
5,863,473
-101,995
5,558,485
92,312
Small Trader
793,623
-7,848
1,102,550
-15,895
Gold
Large Speculator
373,128
14,303
71,208
5,112
Commercial Hedger
127,169
7,387
453,490
21,571
Small Trader
49,131
1,620
24,730
-3,373
Live Cattle
Large Speculator
85,326
-1,863
69,935
725
Commercial Hedger
100,695
546
108,663
-2,180
Small Trader
25,451
-793
32,874
-655
S & P 500
Large Speculator
9,077
457
7,415
2,780
Commercial Hedger
45,138
18,032
35,055
1,351
Small Trader
29,044
64
40,789
14,422
S & P 500 (E-Mini)
Large Speculator
506,355
-3,618
444,424
-10,729
Commercial Hedger
2,016,153
128,523
2,090,478
143,281
Small Trader
346,324
42,789
333,930
35,142
Silver (Comex)
Large Speculator
107,555
613
23,894
-2,805
Commercial Hedger
56,671
835
151,872
6,100
Small Trader
24,896
382
13,356
-1,465
Soybeans
Large Speculator
311,052
-6,014
58,978
-15,605
Commercial Hedger
321,970
-47,525
530,615
-42,059
Small Trader
54,499
-6,129
97,928
-2,004
Sugar (No. 11)
Large Speculator
346,059
-3,666
32,988
579
Commercial Hedger
363,089
-29,723
729,596
-37,518
Small Trader
89,395
-5,007
35,959
-1,457
T-Bonds (Chicago)
Large Speculator
137,609
-36,302
71,606
1,166
Commercial Hedger
247,044
9,407
333,923
-28,140
Small Trader
155,085
-1,523
134,209
-1,444
Wheat (Chicago)
Large Speculator
107,849
-10,107
177,677
8,515
Commercial Hedger
186,836
-12,026
121,397
-30,197
Small Trader
46,049
2,296
41,660
1,845
Yen
Large Speculator
85,493
6,095
25,743
-1,359
Commercial Hedger
30,249
-201
88,316
1,324
Small Trader
25,006
-7,005
26,689
-1,076
All data as of latest Tuesday. Table Courtey Barron's
- Soren K.
Read more by Soren K.Group
