A review of this weeks COT numbers for Turd at TF Metals
Simply incredible CoT
Submitted by Turd Ferguson on April 5, 2013 - 4:06pm.
MODERATOR
Let's start with gold as it went exactly as we assumed it would. For the week, price fell $21 and OI fell by 2,500. However, those bland numbers belie some incredible turnover.
On the drop to Tuesday's close of $1576, the Large Specs added 12,300 net new shorts. Likely almost all of this came on Tuesday when OI surged by 10,000 while price fell $25. The Small Specs also added a net 3700 new shorts. And of course this allowed The Gold Cartel to cover a net 16,000 shorts. This drops their net short ratio back to a bullish 2.04:1.
Now silver...
For the 4-day week, silver was down a whopping $1.42 while its OI rose by 4,200. On Tuesday, when silver closed at $27.25, here's how things looked. (Keeping in mind that on Wed and Thu, total OI rose by another 1500 contracts to a multi-year high of 157,212.)
The Large Specs which, just eight short weeks ago were long 42,499 and short 6,588, are now long 38,200 and short 30,055. That's a net change of 27,766 contracts or a shortage of nearly 139,000,000 ounces of silver or about 20% of total global production this year...all shorted by the Large Specs over the past eight weeks. It is important to remember here that The Large Specs don't actually have any silver to deliver, they are simply short the paper. With this week's changes, the LargeSpec net long ratio falls to a has-to-be-a-misprint level of just 1.27:1.
The SmallSpecs got in on the act, too. They added 600 longs but also added 2900 new shorts for a net reduction of their long position of 2300.
And so we turn to the silver commercials. The gross long position which, as a reminder has almost always fluctuated between 30,000 and 40,000 for as long as I can recall, grew again this week. For the reporting period, the Comm gross long position grew by another 2,300 contracts to a record 57,847. As of last night, it may have reached to near 60,000. All of the Spec selling allowed JPM et al to cover some more of their naked shorts. This week they covered another 3200, bringing their total position down to 76,350. Most importantly, the Silver Cartel net short ratio has fallen to 1.32:1. This is the lowest I've ever seen, exceeding the low of 1.34:1 on 12/27/11. That record low marked a bottom and silver proceeded to rally from $26 to $37 in nine weeks.
I SIMPLY CANNOT STRESS ENOUGH HOW EXTRAORDINARILY BULLISH THIS COT REPORT IS. We are clearly on the cusp of a major rally. Did it begin today? Maybe. Will it begin next week or the following week? Perhaps. All I know is that it will begin...and soon. Be ready.
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