Various Asset Protection Strategies with a directed focus on Precious metals, Energy and Agriculture. Three Model Portfolios and valuation models can be found on the upper left hand side.
Oct 26, 2010
The Silver Manipulation May Soon Be Ending
(Referring to the chart above may be helpful when reading this article)
Although most people tend to think the major commercial banks are in no way involved in the manipulation of the silver market, the COT shows otherwise. One would tend to think these traders would at least try to hide this illegal naked short selling from the public, but instead they flaunt it. The purpose of this article isn't to convince anyone of everything but rather extrapolate data from the COT report so that you can draw your own conclusion. Personally, I see this as the commercials losing control of the silver market and the games they've been playing for far too long.
The commercials didn't stop there as they have been consistently increasing their net short position over the last month up until the recent week. During this period, they had the largest net short position since right before the financial crisis (net short 65.4k contracts or 327,000,000 ounces! Or 32.7 of total world bullion inventories).
*Remember each contract is equivalent to 5,000 ounces of silver with total world bullion inventories estimated to be between 900m-1b ounces.
Open Interest: 156,096 – Has been climbing for the past 5 weeks as a furious pace (130k contracts - 156k contracts currently). Nothing can be drawn from this stat on its own but when you consider the 8 largest commercial traders increasing their net short position from 48k contracts 4 months ago to 59k just 5 weeks ago is the first sign they are now having trouble suppressing the price level.
Gross Long Position: 30,023 contracts (150m ounces)
Gross Short Position: (92,150) – The Commercials haven’t had such a concentrated gross short position since they brought down silver violently back in February.
Unadjusted Net Short Position – The commercials didn't stop there as they have been consistently increasing their net short position over the last month up until the recent week. During this period, they had the largest net short position since right before the financial crisis (net short65.4k contracts or 327,000,000 ounces! Or 32.7 of total world bullion inventories).
Net Short Position of the 4 largest commercial banks – This speaks for itself with the ridiculously high level of concentration for the 4 largest commercial banks. They currently hold 51,668 contracts short, equivalent to 33.10% of unadjusted open interest.
Net Percentage: 33.10%
Adjustments for Spreading
Non-Commercial Spreads: 32,169
Adjusted ® Open Interest: 123,927
New Percentage held by 4 Largest: The first adjustment for spreading further increases the top 4’s concentration, bringing it up to 41.69% of open interest.
Net Percentage Held by top 8 Largest: 50.13%
Net Position: (66,653)
Raptors Position – 14,985
Commercial Spread Position- 15,038
Adjusted Net Open Interest- 108,942
Real Percentage held by 4 Largest; 47.43%
Real Percentage held by 8 Largest: 61.18%
Net Position of World Silver Bullion: 33.32% <=== In other words they are short approx 330m ounces of silver
All indicators point towards a coming short squeeze as the commercials failed attempts have already cost them hundreds of millions in aggregate (even more if you include gold). On Oct 5, they lost 230m on the comex alone, which goes to show they can't this kind of punishment much longer).
6 month price target: $32
*Note Silver doesn't have position limits
READ THE FOLLOWING ARTICLES RELEASED TODAY AS THEY HAVE VAST IMPLICATIONS FOR THE SILVER MARKET: