Huge Crude Stakes

This is a syndicated repost courtesy of Alhambra Investments. To view original, click here. Reposted with permission.
There is a titanic struggle going on right now in the oil market. On the one side of the futures market are the usual pace setters, the money managers. Last week, the latest COT data available, they went the most net long since March. If it continues, it will close in on the most positive futures position since the record long they established back in February.
Normally that would be insanely bullish for oil prices. But just as in February/March another part of the futures market has intervened on the other side. Back then it was the oil producers who rising inventory forced into a larger and larger offsetting net short (hedge).
This time, however, it is the swap dealers who are short for reasons that aren’t really clear. The weekly COT report for the last week in October showed a record net short for dealers, just beating their most extreme position from the middle of 2013 at -424k contracts. In the first week and November, they blew away that record at -470k.

This post was published at Wall Street Examiner by Jeffrey P. Snider ‘ November 16, 2017.

Sentiment Synopsis

The Commitments of Traders (COT) reports are nothing other than sentiment indicators, but as far as sentiment indicators go they are among the most useful. In fact, for some markets, including gold, silver, copper and the major currencies, the COT reports are by far the best indicators of sentiment. This is because they reflect how the broad category known as speculators is betting. Sentiment surveys, on the other hand, usually focus on a relatively small sample and are, by definition, based on what people say rather than on what they are doing with their money. That’s why for some markets, including the ones mentioned above, I put far more emphasis on the COT data than on sentiment surveys.
In this post I’m going to summarise the COT situations for four markets with the help of charts from an excellent resource called ‘Gold Charts ‘R’ Us’. I’ll be zooming in on the net positions of speculators in the futures markets, although useful information can also be gleaned from gross positions and the open interest.
Note that what I refer to as the total speculative net position takes into account the net positions of large speculators (non-commercials) and small traders (the ‘non-reportables’) and is the inverse of the commercial net position. The blue bars in the middle sections of the charts that follow indicate the commercial net position, so the inverse of each of these bars is considered to be the total speculative net position.
Let’s begin with the market that most professional traders and investors either love or hate: gold.

This post was published at GoldSeek on 14 November 2017.

Gold And Silver: Something Different Is Occurring

JP Morgan, at least according to the daily Comex warehouse report, added over half a million ozs of silver to its ‘historic’ stash of silver at the Comex: TF Metals Report. It would be even more interesting to see an actual independent accounting of that specific metal which would track the serial numbers on the bars to the legal owner of title.
I’ve been hedged in my mining stock portfolio since early September. The signal for me to hedge is the reliable Comex bank ‘net short’ position as reported in the weekly Commitment of Traders report. Since late summer, the bank net short position, and the corresponding hedge fund ‘managed money’ net long position, has been at an extreme level.
Historically this is the signal that the Comex banks will implement what I call a ‘COT open interest liquidation’ take-down of the gold/silver price using Comex paper to trigger hedge fund stop-loss positions. This enables the Comex banks to cover their shorts and print huge profits. It’s also illegal trading activity but that’s for another day.
In early September, in ‘eyeballing’ the gold chart in conjunction with the historical COT data I have set up in a spreadsheet back to 2004 , I figured that the open interest – which was in the high 500,000’s at the time – needed to come down at least 100-150k contracts. I thought it would take a price take-down from $1320 to $1230/$1240.

This post was published at Investment Research Dynamics on November 8, 2017.

Trading And Investing In Gold: Follow The Money

The paper gold attack that I first suggested might occur in the September 7th issue has taken gold from $1360 down to $1270 (continuous contract basis). Technically, gold has moved from an ‘overbought’ condition to a mildly ‘oversold’ condition. The RSI and MACD indicate that gold is slightly ‘oversold’ but I believe both indicators will flash ‘extremely oversold’ before this price attack over. This should occur sometime in the next 2-3 weeks.
I say this because I continue to believe the open interest in Comex paper gold, combined with the analyzing the weekly Commitment of Traders report, is the best indicator of gold’s next move, at least until the western Central Banks are unable to control the price of gold with paper derivatives. To be sure, the COT report is not always a perfect predictor but in the last 15 years the two reports combined have been around 90% accurate.
Currently, the Comex banks’ net short position in paper gold is at the high end of its historical range. Concomitantly, the net long position of the hedge funds is also at the high end of its historical range. Per last Friday’s COT report, the banks began to reduce the short positions, thereby reducing their net short position, and the hedge funds began to reduce the long positions, thereby reducing their net short position (click to enlarge):

This post was published at Investment Research Dynamics on October 11, 2017.

SEPT 22A/SENATOR MCCAIN DITCHES LAST ATTEMPT AT REAP OF OBAMACARE AND THAT SENDS GOLD AND SILVER HIGHER/ GOLD ENDS THE DAY UP $1.70 BUT SILVER DOWN 5 CENTS/ BOTH GOLD AND SILVER COT IS GOOD FOR A…

GOLD: $1294.45 UP $1.70
Silver: $16.95 DOWN 5 CENT(S)
Closing access prices:
Gold $1297.50
silver: $17.02
SHANGHAI GOLD FIX: FIRST FIX 10 15 PM EST (2:15 SHANGHAI LOCAL TIME)
SECOND FIX: 2:15 AM EST (6:15 SHANGHAI LOCAL TIME)
SHANGHAI FIRST GOLD FIX: $1303.72 DOLLARS PER OZ
NY PRICE OF GOLD AT EXACT SAME TIME: $1295.85
PREMIUM FIRST FIX: $7.87 (premiums getting larger)
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx
SECOND SHANGHAI GOLD FIX: $1306.41
NY GOLD PRICE AT THE EXACT SAME TIME: $1296.60
Premium of Shanghai 2nd fix/NY:$9.81 (premiums getting larger)

This post was published at Harvey Organ Blog on September 22, 2017.

On Guard Against The Banks

Following the events of yesterday, it seems wise this morning to take an in-depth look at the charts in order to discern what moves The Banks may take next in the hope of stemming this rally and reversing the trends.
Let’s start with Comex Digital Gold. It has been in an UPtrend since July 10 and this rally has carried it $150 or about 12.5%. In doing so, The Commercials on the CoT have increased their NET short position by 182,000 contracts and, specifically, the 24 Banks of the Bank Participation Report have doubled their NET short position, going from 104,748 contracts NET short in July to 213,746 NET short last week.
This places the CoT in its “worst” position since last September and this BPR reveals the largest NET short position on record. Therefore, you KNOW that The Banks will do just about anything at this point to reverse the trend and begin flushing The Specs back out of paper gold. Though they are clearly capable of pulling this off, it may take them a while to do it. Why, you ask?

This post was published at GoldSeek on Tuesday, 12 September 2017.

Looks Like The COT Report Wins Again, As Gold And Silver Fall Sharply

Eventually physical demand for precious metals will swamp the games being played in the paper (i.e., futures contract) markets. So every time the commitment of traders report (COT), which tracks those paper games, turns bearish while gold and silver continue to rise, the precious metals community watches hopefully for signs that fundamentals are at long last about to ignite a massive bull run.
The past couple of months followed this script (see Lightening-Fast COT Reversal: Now Fairly Bearish For Gold And Silver) as gold and silver kept rising for a while in the face of growing resistance in the paper market.
Here’s a more detailed explanation from Hebba Investments via Seeking Alpha:
The latest Commitment of Traders (COT) report, showed another rise in speculative longs for the EIGHTH straight
week. This two-month streak with the net speculative position of gold traders rising every week, has just tied the record-longest gains streak achieved – in the history of the COT report (going back to 2006) it has never risen for NINE consecutive weeks. History for COT nerds (like myself) could be made next week if gold speculators continue their torrid streak.

This post was published at DollarCollapse on SEPTEMBER 11, 2017.

Lightening-Fast COT Reversal: Now Fairly Bearish For Gold And Silver

That didn’t take long at all. Just a few weeks after the Commitment of Traders (COT) Reports for gold and silver turned positive – setting off a nice rally in both metals’ prices – this indicator has flipped back to strongly negative.
In gold especially, speculators (always wrong at big turning points) have loaded up on long futures contracts while closing out their short positions. The commercials (always right at big turning points) have done the opposite, closing out long positions and going aggressively short.
In the week ended August 15, the gold speculators and commercials got about 10% more long and short, respectively. That’s a big one-week move, and brings the imbalance between good and bad positions to nearly 3-to-1 bearish. The trends in silver, while not as extreme, still point in a bearish direction.

This post was published at DollarCollapse on AUGUST 21, 2017.

WTI Jumps Above $50 On Report US Prepping Sanctions Against Venezuela Oil Industry

After both Brent and WTI rose above their respective 50DMAs on Friday, capping 2017’s best weekly rally for oil, the rising tide is accelerating as the latest CFTC COT data confirmed, when net specs boosted bullish Nymex WTI crude oil bets by 27K net-long positions to 423K, the highest in two months, as producers continued to cover short hedges, sending their net position to the most bullish since the summer of 2015.

Meanwhile, oil started the Sunday session jumping out of the gate, with WTI rising above $50 for the first time since May in early Asian trading, following the usual non-material weekend chatter and “noise” out of OPEC (which to exactly nobody’s surprise “can’t stop pumping“), however what has attracted traders’ attention, is a WSJ report that following last week’s latest round of sanctions, and after today’s vote to overhaul Venezuela’s constitution further entrenching Maduro’s unpopular regime, US government officials are considering announcing sanctions against Venezuela’s oil industry as early as Monday, although as the WSJ notes, a full-blown “embargo against Venezuelan crude oil imports into the U. S. is off the table for now.”

This post was published at Zero Hedge on Jul 30, 2017.

Make Way for Uncle Buck

It has been a contrarian trade that has not yet worked out; by that I mean my short position on the Euro and preparation for a firming US dollar. Yesterday the market cheered the supposedly dovish Fed, and USD got smeared again as the world’s counter party paper boosted assets far and wide… on nothing but perceptions and a hell of a lot of momentum and gaming on FOMC day.
USD opened weak again today but so far at least, is sporting a Hammer which, if it stays in play, would be a bullish reversal candle.
Regardless, whether that is a bullish Hammer or not, Uncle Buck is due for a contrary bounce and it is coming due soon. Reference this ‘Currencies’ excerpt from this week’s NFTRH 457 and in particular, the sentiment and CoT profiles. Here is the over-bearish public opinion (graph courtesy of Sentimentrader, mark ups mine)…
From a post-FOMC update to subscribers yesterday…

This post was published at GoldSeek on 28 July 2017.

RECONCILING THE US DOLLAR OUTLOOK with the SUPER BULLISH GOLD AND SILVER COTs…

Because the dollar has such an important bearing on everything, especially the Precious Metals, it is timely for us to take a close look at it here after its recent steep drop, for as some of you may have seen, a number of indicators pertaining to the dollar suggest that, possibly after some further downside it is likely to bounce, or at least take a rest in a sideways range for a while, before the decline perhaps resumes in earnest. We’ll start by looking at a couple of these indicators. The latest US dollar Hedgers chart, which is a form of COT chart, is certainly starting to look bullish, and until these positions ease somewhat, further significant downside for the dollar in the short-term looks unlikely.
***
Meanwhile the latest Dollar Optix, or optimism chart, also shows that pessimism is getting overdone. This doesn’t necessarily mean that the dollar’s downtrend is done, however, as minor rallies can cause this to ease before it then plumbs new lows. These two indicators taken together suggest that a relief rally is likely in the dollar soon, perhaps after it drops a bit lower first, although they don’t mean that the rally will get very far.

This post was published at Clive Maund on Tuesday, July 25, 2017.

Ted Butler Quote of the Day 07-26-17

I have been expecting a price explosion in silver since early May, when the COMEX positioning extremes in silver hit then-record levels (Remember the unprecedented 17 days of consecutive price declines?). But incorporated in my price explosion premise was that the raptors would be ready sellers of their big long positions as prices rose. With the new COT report indicating that not only have the raptors not begun to sell on higher prices, they actually added new longs. If this was no fluke and is indicative that the raptors may be in no rush to sell, then who the heck is going to sell to the technical funds when they plow onto the buy side?

There’s no question that the technical funds will rush to buy (or attempt to buy) many tens of thousands of COMEX gold and silver contracts on higher prices from here; the only question is who will sell to them? If it isn’t the raptors, it is a near-certainty that prices will explode.

This is the perfect set up for a selling vacuum and price explosion that I have long envisioned, but not with such clarity. If there’s ever been a better time to be positioned to the maximum for a silver rally than now, that time is unknown by me.

A small excerpt from Ted Butler’s subscription letter on 22 July 2017.

More precious metals news & information available at
Ed Steer’s Gold & Silver Digest.
 

SILVER GREEN ALERT – ONE OF THE BEST BUYING OPPORTUNITIES FOR YEARS…

There will be no equivocating, fence sitting or any kind of hedging or expression of doubt in what is written in this update. Let me be absolutely clear: – we are now at the threshold of a barnburner rally in the Precious Metals sector, and silver is set to scream higher driven by a massive short covering panic, because short positions in it have ballooned in recent weeks to levels way above what we saw in December 2015, when silver hit its final bearmarket bottom, before the big sector rally during the 1st half of 2016.
We have been on to this for some time, hence the rash of articles over the past couple of weeks on the site recommending various good looking gold and silver stocks, and we will look at more this weekend. This is truly a massive opportunity, but these low prices are not going to be around for much longer. So if you want to fully partake of this rally and buy at the current crazy cheap prices, and haven’t done so yet, you had better pull your finger out and get on with it, because this market is not going to wait on your convenience.
Don’t be fooled into thinking that because silver has rallied towards still bearishly aligned moving averages over the past week or so that it must drop back towards its lows again. That huge candle early this month on big volume which we can see on the 6-month chart below was a final capitulation reversal candle – a bottom. While the price has since been edging higher, the COT has continued to improve to the point that it is even more extremely bullish, so we can expect this so far hesitant rally to gain serious traction soon. Even if we do see a dip, which is considered highly unlikely, it would simply make the picture even more positive, although it is now scarcely possible that it can look much more positive than it is already.

This post was published at Clive Maund on July 22, 2017.

COT Report Gets Even More Favorable For Gold And Silver

Just a quick, happy update on the gold/silver COT reports. See last week’s post for a little more background.
Speculators are running scared in the paper precious metals markets. And that’s a good thing.
The past few months’ correction has finally led hedge funds and other technical/momentum traders to shed their long positions and load up on short bets. Meanwhile the Commercials, which tend to be right at big turning points, are becoming much more bullish.
Historically, the kind of internal structure now evolving in the futures market has signaled the start of a new upswing in prices. That may or may not hold this time around. But if it’s not a screaming buy, it is an indication that that day is getting closer.

This post was published at DollarCollapse on JULY 15, 2017.

Ted Butler Quote of the Day 07-14-17

But there are other factors that may play into the only question that matters, namely, will JPM add to shorts or not. Among those factors are the widespread and growing attention to the extreme COMEX positioning changes and otherwise unexplainable and weird price action in silver, which can only be explained by COMEX positioning. Throw in the wildcard of the new Enforcement Director at the CFTC, James McDonald, and the game’s outcome goes beyond interesting.

As far as I’m concerned, we’re on the verge of discovering if McDonald will go down as perhaps the regulatory hero of all time or if we’ll be calling for his head on a spike. Again, it all comes down to whether JPMorgan adds or doesn’t add to its silver short positions whenever the next price rally commences. I can’t get more specific than that.

As far as what Friday’s COT report will indicate, the dramatic downside price action and extremely high trading volume point to yet another week of significant improvement – big commercial buying and managed money selling. This is also supported by an increase in total open interest in the reporting week (4,000 contracts in silver and 18,000 in gold). We may even see improvements on the scale of last week’s report, but regardless of whatever the actual reported numbers may be, it sure feels to me that we’re at or passed the point of a downside climax, particularly in terms of extreme contract positioning. Full and maximum exposure is warranted, particularly in silver.

A small excerpt from Ted Butler’s subscription letter on 12 July 2017.

More precious metals news & information available at
Ed Steer’s Gold & Silver Digest.
 

Ted Butler Quote of the Day 07-08-17

“Whatever Friday’s report indicates, considering the improvement in market structure over the past few weeks and particularly since the silver top of $18.50 on April 18, we have to be close to the maximum extreme of bullish market structures in silver and maybe for gold as well. Not only do the running results from the COT report show that, the price action seems as deliberate and intentional as is possible. We’ve certainly seen larger price drops in silver than the $2.50 drop seen since the April 18 high, but I don’t recall larger positioning changes. The 17 day consecutive silver price decline into early May was the prime catalyst for my price explosion premise and the new price decline since June 6 looks every much as effective in inducing technical fund selling. Between the two back to back declines, it’s hard to see how every technical fund contract that could be sold hasn’t already been sold, or nearly so.”

A small excerpt from Ted Butler’s subscription letter on 05 July 2017.

More precious metals news & information available at
Ed Steer’s Gold & Silver Digest.
 

Ted Butler Quote of the Day 06-24-17

In silver, I don’t think the actual reduction in this week’s total commercial net short position

should be the main focus. Instead, I think the focus should be on the price action, in that the price decline over the past two reporting weeks has been so deliberately orchestrated so as to signal that we are very close to an important price bottom in silver, almost regardless of what the COT report indicates. I say this knowing full well that silver is the most rigged market of all and one should never underestimate the manipulative power of JP Morgan and the other COMEX commercial crooks in that new price lows can be created at will. Just to be clear, the market structure is now exceedingly bullish in silver and will only get more bullish on any further price weakness.

A small excerpt from Ted Butler’s subscription letter on 21 June 2017.

  More precious metals news & information available at
Ed Steer’s Gold & Silver Digest.

Doldrums and Summer lows? Pining sez No!

With analysts at most public PM websites now turning decidedly bearish, with the summer doldrums staring us in the face, with the new rate hike raising interest rates (on paper making gold less desirable as it provides no yield), and with the gold seasonals suggesting that ‘sell in May and go away’ was the play, there is a definite bearish tilt to the sector right now. That’s why (among other things) we have a great risk-reward setup staring us in the face.
Pining thinks it’s a great place to go long (with stops)! Let me give you a few reasons why, then I’ll outline the trade:
Sentiment:
A quick review of 7 popular and publicly available precious metals analytics/trading sites, and a glance through the comments on those sites, made clear to me that there is (at least roughly) a general consensus in the metals complex right now: after failing to break through 1300, and first pushing through then falling back below the long-term downtrend line in gold, the summer doldrums are upon us and consensus sentiment has turned bearish. The two most likely scenarios I saw discussed were either (1) we languish and churn lower for the next few months following typical gold seasonals pattern into a July or August low, or we cascade from here into an earlier low, perhaps late June or early July.
I like this widespread bearishness very much. This is precisely the type of setup the metals love; wrong-foot the investing public, going against well-known patterns (because it’s never that easy in the metals) and making sure the majority of retail is not on the train and has to chase price. That’s also why the so-so COT doesn’t bother me much, that pattern has been a bit TOO clear recently and has been becoming a little too easy to trade, so I think it’s due for a wrong-foot. In fact it is this ‘juking the crowd’ and subsequent chasing of price on the way up that provides the fuel for the best runs in the metals. This is an excellent setup from a sentiment standpoint. Just ask yourself, when was the last time the majority of retail sentiment was dead-on correct and on the right side of the trade in the metals? Thought so.

This post was published at TF Metals Report on June 19, 2017.