Still Struggling With Silver Open Interest (updated for new CoT)

1st

Resolute longs won't sell. 

Cartel shorts are the majority of the newly added OI.

Downdrafts are not having the same effect as they once did.

JPM is getting cornered.

Time is running out.

Channel is narrowing.

Rat is shitting in the corner, prepared to go nuclear.

Corner is caving in.

Roof coming down.

Rat trying to flee.

OUCH.

Tail caught in trap.

Rat dies.

Kcap

Yes

This is obviously not silver, but I think it bears to keep this in mind when questioning why hasn't price performed since the Fed announced QE to Awesometown.  It took roughly 6 months for gold to break out to new highs after QE 2 was announced.  Then one day with very little fanfare, we broke out of that range and went $100 higher in a month.  Gold went down roughly 8% from 1430 to  1305, very similar to what we have post QE to Awesometown.  6 months from Sep 14 is middle of March. 

I do find it most curious that the Cartel would add 14,000 longs and 19,000 shorts.  Perhaps someone is defecting? 

Yeah about on topic.....I have been shedding tears at the mention of horse meat.  The horse lords have called a meeting of the general council, I have been invited to act as the scribe......EXPECT US!!!!!!!!!!

Edelson has been forecasting a silver crash to the low 20's for many months now.  And once that happens he is ready to back up the truck to ride the long term bull.  Maybe it will pan out.

I’ve been perplexed by recent total OI, and in fact posted my own q here about it a week or so ago. Total Silver OI has been above 150,000 since the big (+0.99) up day on 1/30/13. That’s two weeks now. At the end of day Wednesday (2/13/2013) it was 153,296.

The last record I have of it being anywhere near that high was 11/26/12 when it was 153,398. That was the day after the Dec12 options expired, and presumably was the result of in-the-money options converting to futures contracts, and that spike didn’t last.

Two things the recent high levels might be, but don’t seem related to: the 1/28/13 options expiration, and CME’s lowering of margins on silver contracts.

One impression I have from the charts — I’m currently trying to test it formally — is the most of the wild drops are during Comex hours. Asia, London, and even the access market seem generally (if modestly) up. Go figure. I’m trying to.

I have no clue.  I have a heard enough time following along with the COT data even when you are reading the tea leaves correctly. 

It may be that the market is only driven by sentiment, because the big money needed to drive it is speculative. In which case the metals are on the wrong end of it. I think that around Xmas time, the cartels managed to break the correlations that should have existed between QE and price and drove the spec money into equities.

To do that, they used the SLV as one almighty price shock absorber. Hence the gigantic physical purchase they made.

http://ftalphaville.ft.com/2013/01/18/1343872/slv-and-the-mystery-inventory-build-up/

"...the simplest way to understand the impact that ETFs have on the market is to think of them as giant shock-absorbers and flow deflectors. The funds themselves are in effect nothing more than giant depositories, where inventory (or flow) can be temporarily parked in the “encumbered” off market arena until its potential price impact becomes desirable on the public markets. The intermediaries who manage these flows make money from arbing the small spread opportunities that become available from subtle changes in the curve structure, their own cost of funding and the flow they have available to them, largely by diverting flows in and out of the ETFs versus the public market when it pays them to do so."

I too find myself watching the only thing I can watch hoping to see a real market develop.  Alas, it's not gonna happen, not until the whole paper market fails.  Then and only then will we have real price discovery.  What does it means when the paper price goes up?  What does it mean when the paper price goes down?

All the down price means is that more physical is going into hiding.

Turd,

Perhaps there's a connection between the increased cartel positions on Comex and the recent massive decrease in the SLV short position.  

See Ted Butler's most recent piece talking about SLV.  He doesn't know the answer, but maybe you can join the dots somehow, with some input from your London connections?

Some excerpts from Ted's latest:

"The much anticipated release (by me at least) of the latest short interest statistics for the big silver ETF, SLV, came out late Monday evening. The reason the report was anticipated was because it covered the period of time in which there was an unusual one-day deposit of over 18 million oz into the trust, followed by metal withdrawals of nearly half that amount. ... As indicated in the new data for positions as of Jan 31, short interest in SLV fell an unprecedented (I believe) 10.5 million shares to under 7.3 million shares (oz) 

... the total short position in SLV is now lower than at any point prior to 2011 and as a percentage of total shares outstanding (2.1%) may never have been lower.

...

The odds-on conclusion is that the 10.5 million oz (share) reduction in the SLV short position was initiated by a single entity. Clearly, JPMorgan is the most likely candidate."

I now see that "Sneakdoggiedog" posted a related comment in the previous thread, which is worth re-posting:

"I am constantly coming back in my mind that that motherload of silver deposited into SLV safes last month.  The concept of the Cartel shorting SLV (or futures) until you get a lower price point you want and then going out and buying physical through another means at that lower price to close out a profitable short is genius. If they had tried to cover the huge short within SLV, they would have affected the paper market and caused a squeeze.  If the Cartel really covered with physical. as has been suggested, then why can't they rinse and repeat?  And what does that say about OI and the price point?"

Shorting SLV and then being able to cover your short at a lower price point via the deposit of metal is certainly a loophole that cries out for being exploited.

I keep thinking that the JPM short position on Comex can eliminated via one phone call from Jamie to the PPT.   Or JPM order that the market go to full 100% margin, with JPM covering into the panic and going net long.    

The markets are manipulated.  Ted Butler said years ago, as did Fekete, I believe, that China is behind the big silver short.  They sat on huge piles of silver (they went off silver standard in 1935), so shorting against their long physical was a way to make money on a "dead" asset.

Now, silver is in much shorter supply.  Does China still short, but naked?  So that it can swoop in to gather as much physical wherever it can?

In any case, it is the CONCENTRATION of the shorts that is manipulative.  If it is China, the Fed, or simply JPM's own account, it is concentrated and therefore manipulative.  Someone is cornering the market.

It's winding up tight.

We are close to the monthly chart support.

Big money comes to play now.

The bet is:

trash the support, rally off of monthly lows, and scare the longs so many of them give it up for nothing

vs.

crash the silver market and everyone who bought in the last 18 months has to sell to escape

Game on!

Is it possible that the same entities (JPM/Fed, or JPM/China, or JPM/HSBC) are long and short, not only as cartel members, but also playing the other side? 

Do they own/use other entities to buy what we know as the Large Specs?

In other words, due to the fallout from MFingG, etc., maybe to keep up pretenses, they are both sides of the entire paper game?

If so, they can obviously paint the tape any way they want.  JPM is custodian for SLV, the largest cache of physical silver that is known to exist.  JPM is above the law; untouchable.  The CFTC bows to their magnificence.

Kind of funny, kind of....from an email

Big Gov and their "partners" have a real conundrum on their hands, they can't figure out whether they should kill us, or make us produce.    You have to feel sorry for them, the sheeple are a real problem.

I have tried on several occasions to dig into the COT numbers and understand them. I can not. They don't make sense to me at all - despite all of the excellent analysis and explanation that Turd does with the COT data - frankly, I'm lost. Patterns and logic seem to be non-existent in these data sets.

I'm afraid that I fall into the camp that says the numbers are mostly fabricated and fudged to obfuscate and confuse the market and it's participants intentionally. I suspect the cartel can see all of the numbers, all of the positions - everything - to them it is transparent - to us - it's a brick wall. Honestly I've lost all confidence in the markets, the data and the game. (Everything, that is, except metals in hand).

Job numbers, inflation numbers, etc, etc - all fudged. Why would there not be fudge in the COT numbers?