A Very Interesting CoT

314
106
Sun, Oct 30, 2011 - 3:47pm

As we prepare for another wild and wacky week ahead, I thought that we should first re-visit and study the week that just passed. Specifically, a very interesting Commitment of Traders report.

First, the data. For the period 10/18 - 10/25, the Dec11 silver contract rose over $1, from a little under $32 to a little over $33. Not bad, I'm sure we'd all take that $1/week into infinity. But, as is often the case, there's more here than meets the eye. Namely, a significant effort by The Evil Empire to paint a false picture of silver market price action post the historic CFTC position limit ruling.

Below is an hourly chart of silver. Clearly, this can be marginalized as Turd choosing to see what Turd wants to see but, for me, the chart speaks volumes. When combined with the CoT data, the picture comes into sharp focus.

Let's look specifically at the period of time between the vertical lines I've drawn which block off the time period through which the latest CoT survey measures. First of all, you'll quickly notice that silver rallied sharply following the CFTC vote on 10/18, almost $1.50 in a four-hour period. Then, almost immediately after the prior reporting period ended, silver reversed and began a relatively steep decline of over $2. Instead of a continued rally post-ruling, which would have indicated to anyone with an IQ north of Forrest Gump's that JPM et al were indeed complicit in manipulating silver all these years, silver inexplicably declines from a Tuesday evening high of $32 to a Thursday morning low of under $30! Silver then begins to rally back but, by as late as 10:00 a.m. this past Tuesday, it was still only trading at $31.50. Only in the final hours before this week's CoT survey was taken did silver shoot up over $1.50 and finish the period above $33. It then rallied for the remainder of the week and closed on Friday at $35.37.

Now, let's look at the latest CoT data:

Silver COT Report - Futures

Large Speculators

Commercial

Total

Long

Short

Spreading

Long

Short

Long

Short

23,660

12,638

21,580

38,176

61,692

83,416

95,910

655

-15

1,375

-1,945

2,797

85

4,157

Traders

59

37

45

41

41

126

104

Small Speculators

Long

Short

Open Interest

23,650

11,156

107,066

3,624

-448

3,709

Note first the action of the "speculators". Large and small specs added about 4,300 longs and covered about 450 shorts. Then notice that The Evil Empire did the opposite. They decreased longs by 1,945 contracts and added about 2,800 shorts. Of course, this is "normal" silver market behavior. The banks willingly supply the fresh paper for the specs to buy. But, is there more to it than that? I think so.

1) We've frequently discussed the phenomenon of "Happy Tuesday" here. From the old blog, here's the earliest reference to the notion that silver and gold typically rise on Tuesdays as banks attempt to mask the true size of their positions by covering a few of them ahead of the weekly CoT survey.

https://tfmetalsreport.blogspot.com/2010/12/wicked-witch-of-new-york.html

2) After the post-ruling rally on 10/18, the EE flooded the silver market with fresh paper silver. For example, on 10/19, a day that saw silver fall over $1, the total open interest rise by 2,100 contracts!

Daily Settlements for Silver Futures (PRELIMINARY)

Trade Date: 10/19/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

OCT 11

31.825

31.840

31.340

-

-.549

31.252

39

146

NOV 11

31.975

31.975

31.330

-

-.551

31.258

98

87

DEC 11

32.050

32.150

31.145

-

-.554

31.277

43,365

60,041

JAN 12

31.860

32.150

31.205

-

-.556

31.295

125

214

MAR 12

31.920

32.085

31.210

-

-.557

31.317

4,470

11,600

MAY 12

31.620

31.620

31.620

-

-.564

31.333

487

3,008

JLY 12

31.740

31.740

31.740

-

-.566

31.343

229

2,538

SEP 12

31.710

31.710

31.300A

-

-.562

31.343

344

1,181

DEC 12

31.610

32.095

31.470

-

-.564

31.343

570

11,118

JAN 13

-

-

-

-

-.564

31.324

-

1

MAR 13

-

-

-

-

-.568

31.281

-

752

MAY 13

-

-

-

-

-.572

31.238

-

141

JLY 13

-

-

-

-

-.576

31.187

13

2,304

DEC 13

31.200

31.200

31.010

-

-.576

31.111

34

7,882

JLY 14

-

-

-

-

-.582

30.926

-

262

DEC 14

-

-

-

-

-.586

30.836

5

1,317

JLY 15

-

-

-

-

-.596

30.581

5

190

DEC 15

-

-

-

-

-.606

30.446

5

548

JLY 16

-

-

-

-

-.606

30.221

5

27

Total

49,794

103,357

Daily Settlements for Silver Futures (PRELIMINARY)

Trade Date: 10/20/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

OCT 11

30.370

30.375

30.105

-

-.986

30.266

7

164

NOV 11

30.985

31.195

30.010

-

-.988

30.270

25

93

DEC 11

31.235

31.375

29.935

-

-.996

30.281

44,817

60,707

JAN 12

30.490

31.290

30.350

-

-.998

30.297

63

207

MAR 12

31.210

31.400

30.000

-

-.997

30.320

2,681

12,580

MAY 12

31.285

31.285

30.220

-

-.997

30.336

296

2,96

JLY 12

30.510

30.510

30.170

-

-.997

30.346

73

2,602

SEP 12

30.360

30.365

30.245

-

-.996

30.347

32

1,309

DEC 12

30.915

30.915

30.640

-

-.995

30.348

166

11,368

JAN 13

-

-

-

-

-.996

30.328

-

1

MAR 13

-

-

-

-

-.997

30.284

-

752

MAY 13

-

-

-

-

-.997

30.241

-

141

JLY 13

-

-

-

-

-1.000

30.187

-

2,312

DEC 13

-

-

-

-

-.992

30.119

6

7,908

JLY 14

-

-

-

-

-.990

29.936

-

262

DEC 14

-

-

-

-

-.988

29.848

1

1,312

JLY 15

-

-

-

-

-.988

29.593

-

185

DEC 15

-

-

-

-

-.988

29.458

-

548

JLY 16

-

-

-

-

-.988

29.233

-

27

Total

48,167

105,441

The following day, the 20th, saw silver virtually unchanged yet the total silver OI again rose by another 1000 contracts.

Daily Settlements for Silver Futures (PRELIMINARY)

Trade Date: 10/21/2011

Month

Open

High

Low

Last

Change

Settle

Estimated

Volume

Prior Day

Open Interest

OCT 11

30.625

30.625

30.625

-

+.907

31.173

2

18

NOV 11

30.565

31.365

30.565

-

+.912

31.182

35

94

DEC 11

30.555

31.515

30.280

-

+.912

31.193

29,055

61,377

JAN 12

30.340

31.380

30.340

-

+.912

31.209

72

200

MAR 12

30.420

31.460B

30.420

-

+.911

31.231

1,402

12,978

MAY 12

30.465

31.090B

30.340

-

+.911

31.247

195

2,972

JLY 12

-

-

-

-

+.910

31.256

160

2,635

SEP 12

-

-

-

-

+.909

31.256

13

1,329

DEC 12

30.615

31.430

30.590

-

+.904

31.252

87

11,390

JAN 13

-

-

-

-

+.904

31.232

-

1

MAR 13

-

-

-

-

+.904

31.188

-

752

MAY 13

-

-

-

-

+.904

31.145

-

141

JLY 13

-

-

-

-

+.904

31.091

-

2,312

DEC 13

-

-

-

-

+.903

31.022

-

7,912

JLY 14

-

-

-

-

+.903

30.839

-

262

DEC 14

-

-

-

-

+.894

30.742

10

1,312

JLY 15

-

-

-

-

+.894

30.487

-

185

DEC 15

-

-

-

-

+.894

30.352

10

548

JLY 16

-

-

-

-

+.894

30.127

-

27

Total

31,041

106,445

3) The clear, net effect of EE shorting and selling was to disrupt the immediate aftereffects of the CFTC ruling. Again, by stifling the post-ruling rally, the EE was able to make the "tape" look like the ruling had no impact, whatsoever.

4) Furthermore, by selling and shorting into the spec buying fervor that accompanied the ruling, The Forces of Darkness were able to control the ascent of silver following this decidedly bullish decision.

5) In typical "Happy Tuesday" fashion, JPM et al cover their tracks by buying during the morning of the 25th. Though silver was up almost $1.50 on the 25th, total OI rose only a miniscule 223 contracts. Clearly, the primary cause of the rally last Tuesday was EE short covering and closing of contracts.

So, what's the point, you ask? It's simply this: The Evil Empire is still in charge of the silver market and, even though they are faced with the eventual imposition of position limits, they will still manipulate the price of silver to their benefit whenever they deem necessary.

What does this mean for you? Until, the position limits mandated by the Dodd-Frank law and imposed by the CFTC are enacted, you must be wary of further, wild bouts of silver market manipulation. In the last six months alone, we've seen two, separate 30% takedowns in silver. Do not be surprised if more "interventions" occur in the near future. Until the day comes that The Evil Empire is reduced to being simply another market participant, traders of silver must remain cautious, continually guarding against, and hedging for, the next deliberate price manipulation event. TF

11:11 pm EDT UPDATE:

It's not even Monday yet and I'm already sick of this week.

In a move that absolutely no one could have seen coming <sarc on>, the Bank of Japan has apparently decided that a USDJPY of 76 was simply too much to take. Can you blame them? An economy that is based upon exports can not survive, much less prosper, with currency that is surging to 60-year highs against The Pig. This move was announced about an hour ago and the impact that WOPR has had on the thinly-traded, Sunday evening Globex has been enormous. Yuck. We'll just have to see how long it will take the PMs to recover. Ultimately, a devaluation move such as this is PM POSITIVE, not negative, but that requires actual thought and analysis, not just an algo pumped into a computer, rigged for high frequency trading.

Good night. TF

9:40 am EDT UPDATE:

Looks like I picked the wrong week to quit sniffing glue/hittin the Jack/methamphetamine/oxycontin/smokin crack.

Lots and lots of nasty and strange stuff going on this morning. BoJ intervention, MF Global bankruptcy, Italian CDS exploding, stocks down, bonds up, dollar up, commodities down. It's going to be a wild week.

Here are some updated charts. For now, support is holding just fine but watch these levels closely as they will be your clue as to where we go from here.

More later. Hang in there. TF

About the Author

Founder
turd [at] tfmetalsreport [dot] com ()

  314 Comments

MASTERSR6
Oct 30, 2011 - 3:50pm

First!!

1st!!!

H - original
Oct 30, 2011 - 3:59pm
108

Still the weekend... so can I put this here?

Something I put together last night -

https://www.youtube.com/embed/90l7BBXCY9s

Thanks for the post too Turd...

Moderators, please feel free to move my video to another forum if it doesn't belong here. I was just wanting to share with folks in the run up to Halloween :)

¤
Oct 30, 2011 - 4:04pm

Thanks Big Yellow Hatted one they call TF

Thats a lot to digest numbers wise. Appreciate you broke it down and made it clearer.

Xty...I see you and I still share the same dreaded (hoped for at times ) "last post syndrome".

I actually like it at times because it means we get a new update as a consequence. Nice trade off!

even steven
Oct 30, 2011 - 4:04pm

silver - the schizoid metal

hmmmm... things that you may have already heard, but few that may be of interest...

Ross Beaty: Silver the Schizoid Metal
ScottJ
Oct 30, 2011 - 4:05pm

Hello to the universe...

Hello to the universe...

I have been in some interesting places in the last week...

More to be told soon, or so I think at least ;)

We are all about to journey into something very beautiful.

Hold on tight, the roller coaster has its ups and downs, but is long awaited and long deserved by humanity.

The days of our lower consciousness are over. From evermore we are evolving at an accelerating pace. Let us all experience life together, for what are the times if we can not do it together...

More soon, depending on where the frequencies cross...

https://thehardrightedge.com for my spiritual revolution blog.

Those who are drawn to what I am talking about, let us continue the conversation here:

https://www.tfmetalsreport.com/forum/2820/welcome

-

Everything is going to be alright. If what I see is true, then we are in for quite a ride. Become aware of everything and the black holes of your consciousness will start to fade away.

-

Scott J

¤
Oct 30, 2011 - 4:10pm

Scott

When you get a chance. Could you please repost that piece you did a while back on the false market concept (lack of a better term) when we seemed to be in the thick of that algo phase at one time?

I think you know what piece that was. (and i recall a nice silver piece you did also) I forgot to book mark them and wanted to go back and do so after but got side tracked with what gathered elsewhere for here.

That was some interesting stuff you discussed and I'd like you to give us your takes on some of these market events as they unravel. You have some interesting takes on the market at times.

Thanks

even steven
Oct 30, 2011 - 4:15pm

something from main stream media

it is few days old and we may have seen it, but it is worth spending few minutes during this rainy week-end...

Video unavailable
¤
Oct 30, 2011 - 4:28pm

Oh...what a surprise! Didn't see that coming did we?

Share

U.S. Planning Troop Buildup in Gulf After Exit From Iraq Andrea Bruce for The New York Times

United States soldiers performed a closing ceremony on Oct. 20 for a base in Tikrit, now under the control of Iraqi forces.

By THOM SHANKER and STEVEN LEE MYERS
Published: October 29, 2011

MacDILL AIR FORCE BASE, Fla. — The Obama administration plans to bolster the American military presence in the Persian Gulf after it withdraws the remaining troops from Iraq this year, according to officials and diplomats. That repositioning could include new combat forces in Kuwait able to respond to a collapse of security in Iraq or a military confrontation with Iran.

The plans, under discussion for months, gained new urgency after President Obama’s announcement this month that the last American soldiers would be brought home from Iraq by the end of December. Ending the eight-year war was a central pledge of his presidential campaign, but American military officers and diplomats, as well as officials of several countries in the region, worry that the withdrawal could leave instability or worse in its wake.

After unsuccessfully pressing both the Obama administration and the Iraqi government to permit as many as 20,000 American troops to remain in Iraq beyond 2011, the Pentagon is now drawing up an alternative.

https://www.nytimes.com/2011/10/30/world/middleeast/united-states-plans-...

treefrog
Oct 30, 2011 - 4:32pm

O.T. GOD'S MESSAGE FOR SOCIALISTS

‎"Why would God, with just ten things to tell Moses, choose, as one of them, jealousy about the things the man next door has? And yet think about how important to the well-being of a community this commandment is. If you want a donkey, if you want a meal, if you want an employee, don't complain about what other people have, go get your own. The tenth commandment sends a message to collectivists, to people who believe wealth is best obtained by redistribution. And the message is clear and concise: Go to hell."

....P.J. O'rourke

ScottJ
Oct 30, 2011 - 4:37pm

The more you interact the

The more you interact the more "black holes" go away. Keep interacting!

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8/21 10:00 ET Existing home sales
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Key Economic Events Week of 8/12

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7/30 8:30 ET Personal Inc/Spending & Core Inflation
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Key Economic Events Week of 6/24

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6/18 8:30 ET Housing Starts and Building Permits
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