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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      67 Comments

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    Whitecastle123Blackwatersailor
    May 22, 2017 - 6:49pm

    Mike97

    just tried Google, works fine. Try TFMetals report. Save it to your home screen.

    but I'm just a tech illiterate with a cocktail so what do I know.

    Blackwatersailor
    May 22, 2017 - 6:19pm

    And Now for something alittle different

    Thought I'd pipe up about what I saw visiting relatives. Farmers planting very late. This means a late harvest. Farmers almanac says late fall lots of precipitation. This suggests a high failure rate on fall harvest. At least up here in Canada. Drove around the prairies pretty much the same through B.C., Alta, Sask, and Man. I figure you people who trade should be able to take advantage. If farmers cant get crops off before mid late Sept I suspect it will rot in the field.

    Background: I grew up a farmer/rancher with most of my relatives being the same. Just reporting what I've seen and what I've heard from friends and family. Do your own research or be your own fool.

    cashonly
    May 22, 2017 - 6:03pm

    Wot's in u-r-r-r-r-r wallet?

    wowzers! only 9.99 to store nothingness... bigly!

    "is that a parrot in yer pocket or are you holding out some digi-fiat on me, ar-r-r-r-r?"

    guyeson
    May 22, 2017 - 6:00pm

    Shooting for Sept 1

    Last I spoke with Ron, Sept 1 is the date we were targeting.

    guyeson
    May 22, 2017 - 5:55pm

    new Turd site start date?

    Any updates on the upgraded TFMetalsReport site start date, Turd?

    mike97
    May 22, 2017 - 5:34pm

    TFMetals.com is gray listed when I try to access on my Iphone

    I can't access using Google, Bing , Yahoo etc. However I am now accessing on Safari on my iPad. Anybody else having this problem?

    canary
    May 22, 2017 - 5:33pm

    OK, so we're having a small silver rally now...

    How can I verify if JPM adds to short positions or not?

    RickshawETF
    May 22, 2017 - 5:33pm

    Re: Clif High

    Whatever he's smoking, I want some! Talk about a call on BTC!

    His January ALTA Report, created on Jan 13 (when BTC was $823.00), stated:

    "This $500 USD drop in price is indicated to be starting from very near to $2300."

    Well, this morning BTC hit $2287, and has since dropped to $2148 . . .

    He sure called the interim top -- just sayin'

    Visit the FAQ page to learn how to track your last read comment, add images, embed videos, tweets, and animated gifs, and more.

    phoenixphoenix
    May 22, 2017 - 5:19pm

    Ted Butler from 12 May.Might be worth watching out for, JPM

    "Should JPMorgan not add to its COMEX short position on the coming silver price rally, then it will be only a matter of time before the remaining big COMEX shorts wake up to the fact that they are toast. By “a matter of time” I am referring to days and weeks. When silver prices rise sufficiently, the remaining shorts will panic and begin to try to cover their short positions. This buying will send silver prices skyward."

    https://www.silver-phoenix500.com/article/silver-price%E2%80%A6expecting-unexpected

    SteveW
    May 22, 2017 - 4:46pm

    Mike Flynn invokes his 5th amendment rights

    So what's going on there. When the story appeared about his conversation with the Russian ambassador and not informing Mike Pence there was a speculation that pedogate had been discussed and that a good friend of Pence was implicated. If true he certainly doesn't want that out prematurely.

    Regarding the Comey piece I also found it a very well written piece of putting 2 and 2 together from all the publicly available information around these issues. The key thing is why did they wait until Comey was in LA and then he finds out from news reports. Clearly they wanted him out of the loop. BTW two days after his firing it was reported the Susan Rice wants immunity and was responsibly for all the unmasking.

    Now its been in the MSM that Seth Rich was the DNC leak, something we already knew based upon careful reading of the events. So where does that leave the Russia investigation.

    The circus, Ringling brothers/Barnum and Bailey, had its last show yesterday. So we're left with just the DC circus, the next few weeks of congressional investigation and possibly the new interim director of the FBI cleaning house with terminations. Interesting times.

    Victoria Day in Canada (QV was born May 24, 1819) so our markets are closed. Otherwise I could have bought Ag at $17.03 at the open. Who knows where it will be tomorrow since it likely still has legs to get over $18 in the near term. Maybe my SLV 16.5 calls for this Friday, which I bought too early on that 16 day crash, will come back into the money.

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