Marshall Swing: Big PM Rally Imminent? “Fugget About It!
by Marshall Swing, Silver Doctors Price goes up when the cartel wants it to and down when they want, as well. Metal price is a puppet on strings consisting of shorts and longs from both above and below. If one can learn to read the numbers , then price direction is somewhat easy to predict. Some writers partial to Speculators were hoping for a great long rally to crush the Commercial’s vast short positions. Ain’t going to happen. “Fugget about it!” Two weeks ago, I made the bold statement the majority of new contracts was a setup by the Commercials (since they took most of the positions in it). Last week, I intimated the run up in price was basically a complete set up for a fall because Commercials took virtually all the short side of the bet. In that same report, I showed there were still new open interest gains after the COT week. In this week’s numbers we see those new open interest totals were left almost unchanged by the end of the COT week and price gains leveled off. But after the COT week, last Thursday, came the assault on the new longs of the Speculators and looking at Tuesday’s CME dailies we see a reduction of almost 20,000 gold contracts. Sometimes these trends are just too easy to see! Some writers partial to Speculators were hoping for a great long rally to crush the Commercial’s vast short positions. Ain’t going to happen. “Fugget about it.” Price goes up when they want it to and down when they will it to, as well. Metal price is a puppet on strings consisting of shorts and longs from both above and below. If one can learn to read the numbers , then price direction is somewhat easy to predict. In silver, at the end of the COT week, Large Speculators has taken 3,519 new long contracts for their total, giving up 3,554 shorts and Commercials added 5,329 shorts. A few Small Speculators grabbed 571 shorts and hopefully they sold near the bottom of the Commercial’s short covering raid. There was much speculation about the raid with differing theories but in the end it does not matter whether a leak happened and the covering took place before the change in margin backing was made public or whether as some think a physical gold run on the house was averted. It does not matter what the reason, if in fact there was a reason, other than greed and profit (dark, smoky filled room with Commercial’s colluding) at all. I showed you how the Producer Merchant and the Swap Dealers were acting congruently gluttonizing shorts so what more evidence does a prosecutor need? My point, of course, is I told you way in advance it was going to happen. It was obvious in the numbers they (Commercials) were up to something, in both of the last reports, and price was going to take a U-turn. Now you see ‘em, 20,000 new gold contracts, and now you don’t! Easy come, easy go… In gold, by the Tuesday close in the COT Week, Large Speculators had taken 15,150 new long positions while giving up 11,320 shorts but Commercials had piled on 24,730 new shorts. Just like in silver, the gold Small Speculators did not seem to know what to do. Either that or wisely they did not do anything. So, after the COT Week, we see a great silver crash and the reduction of almost 20,000 gold contracts BUT on the silver side of the house DESPITE DECLINING PRICE and despite an all out raid we see the addition of about 6,000 contracts to total open interest. So, guess who buys long contracts near the bottom of short covering raids? A few Speculators might have guessed a bottom was near but my “guess” is we could see the Commercial’s long totals rise a little in Friday’s numbers if there are no major price deviations until then. One thing of contrary note is on the silver chart there was what I call a repositioning exercise in Asia on Tuesday early morning and its symmetry is unmistakable to those who are familiar with my analysis. If those 6,000 longs belong to Commercials, we will see price rise in the near term but Tuesday’s exercise could obfuscate those numbers making this situation too close to call. I would definitely not make any contract or options bet for the short term. A review of the CME dailies show the rise in silver open interest mostly occurred after the bottom was in place and the current price rise started Friday morning. Much too close to call but I am thinking price will drift up a little. Reporting from the wilderness of Southern Illinois, stay thirsty for physical metal at these cheap prices, my friends! Marshall