Unless the shorts can pull a rabbit out of their shpintoid muscle on Monday, expect to see some very unhappy faces in the silver short camp AND quite a few hedgies will have their heads handed to them. I hope the shorts can actually get their hands on the real deal silver. We should see financials shortly for UC. This could be quite a ride over the next few months.
The Commitment of Traders Report
*The large specs reduced their long positions by 1,148 contracts and increased their shorts by 4,468 contracts.
*The commercials increased their longs by 2,026 contracts and decreased their shorts by 6,815 contracts.
*The small specs increased their longs by 496 contracts and increased their shorts by 3,721 contracts.
*The large specs increased their longs by 1,929 contracts and increased their shorts by 25,113 contracts.
*The commercials increased their longs by 4,327 contracts and decreased their shorts by 24,244 contracts.
*The small specs decreased their long positions by 415 contracts and increased their shorts by 4,972 contracts.
The specs have been pouring in on the short side, while the commercials have been doing a good deal of covering. With the fundamentals so bullish, we have a set up for a violent price reversal at any time.
So how does this input equate to the "silver story" presented above?
We know from last week's COT report and what the open interest has been doing, the strong hand buyers have been doing just that. The commercial long position went up again, which confirms these buyers are contining to take on JPM.
That the commercial short postion went down so much suggests JPM, while selling to set the tone for the day, could have been covering some of their shorts. Hard to say.
What is so stunning is the total increase in new short positions by the large and small specs as of last Tuesday. This means these strong hand buyers may soon have the support of these new spec shorts should the price of silver move up a a fair amount and the spec shorts are the ones who are doing the covering. IF JPM is trying to cover at these levels and is not going to try and force silver to break its base, there could be a vacuum right above the market with no nearby sellers. This could set up a dramatic spike to the upside.
Gold has rallied to $1581 and silver to $28.75 in Access Market trading.