The Commitment of Traders Report, for positions held at the close of COMEX trading on Tuesday, showed a bit of a decrease in the Commercial net short position silver — and somewhat larger increase in the commercial net short position than I was expecting.
In silver, the Commercial net short position declined by 870 COMEX contracts, or 4.4 million troy ounces.
They arrived at that number by reducing their long position by 629 contracts, but they also reduced their short position by 1,499 contracts — and it’s the difference between those two numbers that represents their change for the reporting week.
Under the hood in the Disaggregated COT Report it was all Managed Money traders, as they increased their net long position by 1,120 contracts…mostly by reducing their gross short position by 1,099 contracts.
The other two groups of traders both decreased their net long positions…the Other Reportables by 1,446 contracts — and the Nonreportable/small traders by 544 contracts.
Doing the math: 1,446 plus 544 minus 1,120 equals 870 COMEX contracts, the change in the Commercial net short position.
The Commercial net short position in silver now sits at 27,778 contracts, or 138.9 million troy ounces…down from the 143.2 million troy ounces that they were short in last week’s COT Report.
The Big 8 are short 292.8 million troy ounces in this week’s COT Report, down from the 302.1 million troy ounces they were short in last week’s COT Report.
But as Ted has pointed out over the last several weeks, because the short position in silver is now so large, that two or possibly three Managed Money traders currently inhabit the Big 8 category…which up until three weeks ago, had only contained traders in the Commercial category. For that reason, the true short position of the Big 8 traders that matter, the big banks and investment houses, can’t be computed with complete accuracy.
But the bumped commercial traders haven’t disappeared, as the commercial trader that was squeezed out of the Big 4, is now in the ‘5 through 8’ category — and the one or two of the ‘5 through 8’ that got bumped out by a Managed Money trader are sitting in the #9 and #10 spots on the short side. They will return to their usual positions in the Big 8 category on the next decent rally when these two or three Managed Money traders start short covering in earnest. We may have seen the start of that in early morning trading in New York yesterday morning.
As far as Ted’s silver raptors are concerned, the commercial traders other than the Big 8…who are all mega net long the COMEX futures market in silver, they were sellers this past reporting week, as they decreased their net long position by around 5.0 million troy ounces/1,000 COMEX contracts.
From the numbers posted a few paragraphs ago, the Big 8 traders are short about 217 percent of the Commercial net short position. But, as I just pointed out above, this number is somewhat flawed — and that’s for the simple reason that the Big 8 are not all commercial traders now.
But even allowing for that fact, the Big 8 commercial traders have a short position just slightly below 200 percent of the Commercial net short position in silver, which is still outrageous and obscene.
Here’s the 3-year COT chart for silver, courtesy of Nick Laird as always — and this week’s change barely registers. Click to enlarge.