Some Perspective On The Latest Commitment Of Traders Report

67
Mon, May 22, 2017 - 8:00am

Last Friday's CoT for the Comex Metals was rather interesting from a historical perspective. Because of this...and because we know that not everyone listened to Friday's podcast...it seemed appropriate to type up this written summary today.

Before we begin, it is VERY important to note the restrictions that have been deliberately placed on this info by the CFTC. Even though the Commitment of Traders reports are surveyed at the Comex close each Tuesday, the CFTC purposefully waits 74 hours before releasing the data to the general public. As you consider the degree to which the "regulators" at the CFTC are complicit in the ongoing price management and manipulation, ask yourself why it takes a handful of dedicated public servants 3 days to crank out these spreadsheets: https://www.cftc.gov/dea/futures/other_lf.htm

Also, we are going to assume that this data is accurate. There have been occasions in the past where the CFTC has put out some numbers that seemed odd and inconsistent to those of us who follow the reports weekly....only to have the CFTC come back the following week and correct their "mistakes".

And lastly, never assume that this data is sacrosanct and honestly reported by The Banks. Over just the past three years, JPMorgan has been fined on several occasions for knowingly submitting false data:

  • https://www.bloomberg.com/news/articles/2016-03-23/jpmorgan-fined-by-cft...
  • https://www.cftc.gov/PressRoom/PressReleases/pr6968-14
  • OK, now that we have that behind us, let's take a look at last Friday's report and point out a few of the important points.

    Let's start with Comex Digital Gold (or as we call it here, "CDG"). As you assess where price may go from here, please consider the following:

    • Over the past three reporting weeks, price has fallen by $35 or nearly 3%.
    • During this time period, the Large Speculators in CDG have reduced their NET long position by over 71,000 contracts or about 37%.
    • As of last Tuesday, when this latest CoT was surveyed, the Large Spec NET long position was just 126,724 contracts and the Commercial NET short position was just 142,859 contracts. These are the lowest NET positions since the CoT survey of February 21, 2017.
    • At 142,859 contracts NET short, the Commercial NET short position has been trimmed by more than 1/3 in just the past three weeks.
    • Perhaps most importantly from a historical perspective, at the recent price highs of July 5, 2016, the NET long position of the Large Specs was 316,037 contracts and the NET short position of the Commercials was 340,207. Ask yourself how high might price rise if these 200,000 Spec longs return to the Comex over the next few months?

    Finally, for CDG, consider this chart:

    Now let's turn our attention to Comex Digital Silver or "CDS" for it's here that the changes are rather eye-opening. Let's lay some of them out as we did above for CDG:

    • Over the past five weeks, price has fallen by $1.58 or about 8.6%.
    • During this same time period, the Large Specs have reduced their NET long position by over 62,000 contracts or about 59%.
    • As of last Tuesday, the Large Spec NET long position was just 43,004 contracts and the Commercial NET short position was just 57,337 contracts. These are the lowest NET positions since February 2, 2016.
    • At 57,337 contracts, the NET short position of the Commercials has been cut almost exactly in half over the past five weeks from an alltime high total of 114,4141 contracts on April 11.

    As you can see, just as in Comex Digital Gold, the recent CoT changes in Comex Digital Silver are significant. But, there are a few more remarkable datapoints you need to know. Again, these are from the report surveyed last Tuesday and released late last Friday:

  • Here at TFMR, we like to look at what we call "The Large Spec Net Long Ratio" when we consider the "bullishness" or "bearishness" of the survey. All we do is take the summary positions from the silver report and divide Spec longs by Spec shorts. The lowest ratio we've ever recorded came from the CoT surveyed July 21, 2015. On that report, the Large Specs in silver were long 66,576 contracts and short 62,331. This produced a ratio of just 1.07:1.
  • On February 28, 2017, we observed the highest ratio we've ever seen at 6.04:1. This ratio was still 4.99:1 five weeks ago with the CoT surveyed April 11. As of last Tuesday, the ratio is all the way down to just 1.75:1 and this is the lowest Large Spec Net Long Ratio we've seen since January 19, 2016.
  • At 112,949 contracts, the GROSS short position of the silver Commercials is the smallest since the CoT of April 5, 2016.
  • The GROSS short position of the Large Specs stood last week at 57,138 contracts, up from 26,454 contracts five weeks ago. But that's not the interesting part. Consider this: At 57,138 contracts, this is the largest Large Spec GROSS short position in silver since the CoT Survey of August 4, 2015.
  • As in CDG, let's put this data onto charts. See below:

    In the end, what does all this mean?

    Well, I suppose you could make the case that these most recent selloffs have washed out any "excess Speculator bullishness" that might have been present a few weeks ago. The CoT could also imply that upside potential now outweighs downside risk. However, for the reasons listed back at the beginning of this post, no one should ever make a trading or physical purchase decision based upon CoT info alone.

    That said, given the similarities the current CoT structure has to the CoTs of late 2015 and early 2016, it seems safe to conclude that the prices of CDG and CDS are very close to...or have made...new bottoms. History suggests that the turnaround may not be immediate but the next price move from these lows could once again be substantial.

    TF

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

      67 Comments

    sengfarmer
    May 22, 2017 - 8:12am

    ?

    Could it be? Yes, the old farmer has struck gold again :)

    vonburpenstein
    May 22, 2017 - 8:13am

    One...

    ...Day we r gonna wake up and be pleasantly surprised and it will have all been worth it

    Close

    RETSPY
    May 22, 2017 - 8:17am

    1st

    This old curmudgeon is keyed to the written word.

    Thanks, TF, for all that you do.

    Jihk2431
    May 22, 2017 - 8:53am

    Turd, what's your gut telling you?

    Is this going to run? It's looks like the COT, combined with the pig now under 97, could portend a big move. I've been waiting for a signal to put some cash to work, so maybe this is it.

    fluxplus
    May 22, 2017 - 8:54am

    Simalar CDG numbers as of end of February

    Turd, looking at your daily chart we had similar CDG numbers as of end of February. And then a few days up and then $60 down to $1200. Is something similar being orchestrated now?

    Marcrward
    May 22, 2017 - 8:55am

    cash to work...

    do IOUs do any work?

    chrtoo
    May 22, 2017 - 9:06am

    Happy Firecracker Day, Canada!

    (Queen) Victoria Day Weekend!

    Well, not any longer but when I was younger it was the best holiday of the year!

    Now, I get to tell my kids about how reckless their Grandparents were to allow their kids to play with fire & explosives, largely unsupervised! Those were the days!

    I still have all ten fingers and both eyes even though I probably started playing with these when I was six.

    CHR.

    infometron
    May 22, 2017 - 9:16am

    A MUST READ FOR ALL TURDVILLE! (Especially you, @Libero)

    Here is your alternative 'narrative' regarding Comey, the Clintons, and the 'Russians':

    https://operationdisclosure.blogspot.ca/2017/05/trump-dropping-hammer-on-comey.html?m=1

    I'll let @Libero inform us as to which 'narrative' comes closest to the TRUTH! (If he can handle it) Perhaps some inkling of hope for draining the swamp remains!?

    EDIT: I just noticed @jwmkratz posted a link to this incredible bombshell on the previous thread, sourcing from Santa's site!

    infometron
    May 22, 2017 - 9:29am

    Jim Rickards

    https://dailyreckoning.com/perils-market-complacency/

    He thinks gold could be the 'big' story this week

    Mickey
    May 22, 2017 - 9:35am

    comey issue

    the big question is the credibility of the author. I like what she says but ......

    however we know something is not Kosher the way Comey indicted Clinton verbally then gave her a pass.

    and all the Lynch Bullshit. For that matter Holder bullshit-why did we never prosecute any bankers-Holder said the reason was their attorneys were better than govt.

    well then let the media prosecute the bankers.

    Mickey
    May 22, 2017 - 9:41am

    operation disclosure website

    kind of strange, but be sure to read the Trump article re: art of war and then the Matt Taibbi link

    i wish i could friend some credibility in the author of the trump comey article-she said she could provide background-she should have just posted it there.

    infometron
    May 22, 2017 - 9:47am

    More on the swamp

    Credibility? MSM? What matters is the truth.

    Here is more on the swamp from Stefan Molyneux:

    If you don't drain the swamp, the swamp drains you.

    @Mickey, can you provide links please?

    Mickey
    May 22, 2017 - 9:57am

    infometron

    go to the home page on operation disclosure .

    scroll all over the place--I found them by accident-although tabbiis article is posted at rolling stone-

    most of the articles, frankly, seem flaky, which discredit the quality.


    May 22, 2017 - 9:58am

    Great work TF

    Glad you made this a public post so people outside the vault can see the kind of analysis we get every day- paying attention to this COT cycle and flow vs price has been very lucrative for me, wish more people could put this intel to work for them.

    Its not a "magic bullet" trading signal but it's darn good to use in conjunction with strategy and charts. Knowing we could see a rise here, or a consolidation into June then a rise, (and when it comes the rise will be substantial and very worth trading) but that odds of deep declines from here are now much lower, is truly important. With care, you can make that pay...

    Safety Dan
    May 22, 2017 - 10:01am

    END OF THE EMPIRE -- Bill

    END OF THE EMPIRE -- Bill Holter

    END OF THE EMPIRE -- Bill Holter

    32:34min

    Published on May 22, 2017

    This video was reposted with permission from https://SGTReport.com

    ORIGINAL VIDEO DESCRIPTION:
    Bill Holter from JS Mineset returns to SGT Report to discuss the current state of the failing US empire. And Bill warns that despite popular opinion that the DOW, S&P and Nasdaq can only go up, the END could come in a flash, and when that happens, many people who went to be rich on a Friday could wake up broke by Monday.
    You have been warned

    OOOBuck
    May 22, 2017 - 10:07am

    Lisa Frank

    based on her delivery and style, is not new to investigative journalism. She sews this story together with a fine stitch.

    Understand, I have no love for our president.... I think the guy is dangerous (although not as dangerous as HRC) but the Frank article has the smell of truth all over it. So many events in the Hillary case and the FBI's behavior as it involved the Trump administration) just didn't make sense until I read it. It affirmed my suspicions and illuminated many dark corners.

    I wonder who she really is.


    May 22, 2017 - 10:12am

    Interesting article, w implications for miners

    Interesting article touching on how unforeseen technological innovations at every level have massively impacted oil industry, but the key thing for me was the relevance to the miners and how they are likely to be driven very soon by these same innovations and hence become more profitable:

    "The information revolution is so powerful that it can reverse what would otherwise be the natural tendency of the oil market.

    But this points to two even bigger stories. One is that the same forces that are making oil and gas so much cheaper and easier to find and extract will also be affecting other commodities. We can expect mining to become more efficient as well, and in fact there’s already evidence of that happening."

    So longer-term cheaper oil than forecast means lower cost of production for miners, therefore more profit per ounce... plus better efficiencies going forward as IT makes entire process more profitable. Me likes!

    Dr. P. Metals
    May 22, 2017 - 10:25am

    @Pining

    RE: "So longer-term cheaper oil than forecast means lower cost of production for miners, therefore more profit per ounce... plus better efficiencies going forward as IT makes entire process more profitable. Me likes!"

    or just a lower all in cost of production, which the banksters will surely know about, so they can manipulate/push prices even lower without breaking things? surprise

    AIJ
    May 22, 2017 - 11:00am

    Clif is smoking on the cryptos

    Hopefully he is right on AG ( for once )

    Ack! June bare naked Wealth report guesstimate for post is May 29. Silvertards 2b happier by then. Data isolated. Processing close 2done.

    Libero
    May 22, 2017 - 11:12am

    Infometron

    Nice fun read. so this is how the site starts:

    Guest Posting

    If you wish to write a post/article on Operation Disclosure all you need to do is send your entry to UniversalOm432Hz[at]gmail[dot]com applying these following rules.

    The subject of your email entry should be: "Entry Post | (Title of your post) | Operation Disclosure"

    - Must be in text format

    - Proper Grammar

    - No foul language

    - Your signature/name/username at the top

    Send your entry and speak out today!

    and this immediately precedes the article:

    Featured Post

    Director of Lockheed, Ben Rich Discloses Existence of UFO Technology

    Ben Rich Source: Humans Are Free | by Arjun Walia To be honest, it's overwhelming, and when you put all of those statements together wi...

    I'll stick with Times and Post writers. thankyou.

    CaptK
    May 22, 2017 - 11:20am

    BTC

    For those interested, watch the world currencies flow into BTC in realtime:

    https://fiatleak.com

    Edit: Notice that all transactions seem to be floating up from that mysterious continent the Antarctic!!wink

    AgAuMan
    May 22, 2017 - 11:35am

    Silver up 2% today @17.137 per toz....

    We need to have a hat contest to guess when the next bombing will be... devil

    canary
    May 22, 2017 - 11:42am

    OI (final)

    Gold Future -7,548

    Silver Future -790 (total 209,081).

    Marcrward
    May 22, 2017 - 11:49am

    are these people retarded

    or just theocrats

    I mean, please, just stupid...or manipulative...

    https://www.marketwatch.com/story/wilbur-ross-heartened-by-lack-of-protestors-in-saudi-arabia-2017-05-22

    ‘I think the other thing that was fascinating to me, there was not a single hint of a protestor anywhere there during the whole time we were there, not one guy with a bad placard.’

    --Commerce Sec. Wilbur Ross

    Winder
    May 22, 2017 - 11:50am

    AIJ

    Do you use Trezor?

    AIJ Winder
    May 22, 2017 - 11:56am

    Winder

    Yes, I hold 90% of my BTC on the Trezor

    tfever
    May 22, 2017 - 11:59am

    What happen?

    Silver is up near 2% where the bank usually capped at 1% days. What's going on?

    muatuyeta2
    May 22, 2017 - 12:04pm

    @ Turd: FOMC meeting on Wed

    Turd, do you think gold and silver go down from here and make a higher low on Wed?

    Bohemian Marcrward
    May 22, 2017 - 12:04pm

    @Marcrward

    USD, as the legal tender, is not IOU. ;-) Of course, the USD as a currency and the legal tender works. It depends on what you see, or want you want to see. For now, cash is the king, too. You can buy 1 USD for 50 cents, for example. Some can do even better, buying 1 USD for 25 cents. You could buy 1 USD for 14 CZK (korunas) in 2008, as I did, and sell it back 1 or 2 years ago, for 26 CZK. There are many things that you can do with the legal tender, but not with IOU. No foreign bank would exchange your IOU for a foreign currency, of course. IOU has very limited functions as "money". Simply, as California did once, the state didn't have enough cash, the USD, so it issued CA IOUs, temporary. IOU is a voucher, not a legal tender, or a currency. Food stamps are not currency either, just a voucher.

    Thor
    May 22, 2017 - 12:07pm

    COT

    Thanks for the analysis, Turd. Let's hope the turnaround is near.

    Santa and Bill are skeptical, as well, that the numbers may be bogus.

    Then we're back to GIGO.

    Become a gold member and subscribe to Turd's Vault

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