A handful of items have collected during the day so I thought I'd begin a new thread.
First of all, the action today. Yes, we did see some short-covering and long-nibbling today but it looks like it was primarily CoT window dressing. Why do I say this? Look at the action since the Comex close. After a closing UPtick of about $5, there has been nothing but selling on the afterhours Globex. Clearly shorts that were taken off during regular hours are being put back on after hours. And this is all done after the weekly Commitment of Traders survey is taken, with the intent of skewing the data as much as possible.
The most important thing is what this chart might be telling us. IF today's action was primarily due to CoT-painting, then tonight, tomorrow and Thursday are likely to see a re-test of last night's lows, at a minimum. (This means I may get to eat my hat after all.) Pay attention to the charts I posted to this morning's thread and watch the action closely for clues as to whether we are seeing play out Scenario #1 or Scenario #2.
The open interest numbers from yesterday are in and they are inconclusive. For the day, with gold down $140, total open interest declined by 3,300 contracts to 426,722. What does this tell us? Well, to drop $140, there had to be incredible selling but, with such a slight OI change, the selling came almost equally from long liquidations and new shorting initiation. Same thing in silver. Down $3 on the day, total OI only fell by 900 contracts to 162,415.
So, again, what we saw yesterday was massive selling but it came in nearly equal parts of long liquidation at the breaks of support and brand new paper short creation. So the question is...which category was buying and which category was selling? In silver, I'd love to see that both categories of Specs were dumping longs and adding shorts while The Commercials both added longs and covered shorts. Is this what, in fact, happened? I guess we'll get some idea on Friday.
Moving on. Several of you have already heard this but I'm posting it here because everyone needs to listen to it. Recorded yesterday, it's a extremely informative discussion between SGT and Ranting Andy. The best use of 20 minutes of your valuable time today.
Tomorrow is Wednesday but the next day is Thursday. To prepare, please click this link and listen to this podcast. Ignore the Canadian banker chick that speaks first and fast forward to the 10:00 mark. I've got high hopes that you'll find it interesting.
Lastly, a very nice Turdite contacted me a few days ago. She's a talented artist and she inquired as to whether or not I'd like to swap some silver for some art. Since most of us feel that, eventually, we will convert some of our precious physical into other hard assets, I thought it might be fun to open her offer up to everyone. So, please check out her site...just don't crash her servers, OK?!? If you see something interesting, make her an offer. She'll even accept fiat if you prefer
Have a great evening/overnight. Be sure to keep a close eye on things. Your signal for short-term direction may be contained in tonight's action.