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Old 10-20-2011, 10:37 AM   #1
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Mr.T Silver COT Most Bullish in Eight Years

Quote :
The Commodity Futures Trading Commission (CFTC) issued its weekly commitments of traders (COT) report at 15:30 ET Friday, October 14. The report is for the close of trading as of Tuesday, October 11.
... now, with silver near the $32 mark, we are currently very near the lowest commercial net short position for silver futures since the bull market began in 2003. As of Tuesday (and as of the prior Tuesday), COMEX futures veterans the CFTC classes as “commercial,” including the bullion banks and the Swap Dealers combined are not positioned as though they believe that silver has very much downside action left in it.
However one wants to look at it, and regardless of what silver does very short term in the days and weeks just ahead, the graphs above are screaming at the top of their lungs like a bullish klaxon. The graphs tell a tale of longer-term opportunity with a high degree of confidence. There are never any guarantees in this business. The price of silver is governed by lots of factors, not the least of which is the much larger and more opaque physical and OTC markets in London, Zurich, Tokyo, Hong Kong, and lest we forget, New York, etc. The price of silver is affected by more than just the futures markets by themselves, in other words. But, friends and fellow Vultures now hear this:

Under these extraordinary COT conditions, when so much of the bullish firepower has been swept out of the futures market (and is therefore at the ready to return at the first sign of a new uptrend) – when even after a huge exodus of speculators we can document the apparent reticence of the commercials to take on more downside bets - when indeed one class of commercial traders now holds the largest net LONG position in years – and after all that, with the price of silver still sporting a $30+ handle, it is most definitely a sign that the normal Big Sellers of silver futures are not, repeat not confident in the price of silver falling all that much farther. If their positioning in futures is any guide, we have to note that the Big Sellers have very strongly and decisively positioned for the opposite.

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Old 10-20-2011, 03:34 PM   #2
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Bollinger bands are converging which typically means we are due for a large move out of a tight range like this. Right now, i'd probably have a negative bias if i was purely using technicals.

However, the COT numbers are crazy bullish for silver so there is a lot of potential for a move higher. If we can clear $33.50 on silver, we should be heading to $38 in short order and potentially higher.
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Old 10-20-2011, 03:36 PM   #3
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Also... here is an interesting bit of chart work on silver. I was surprised by how accurate this was on the way down. If he's right on the way back up i'll be very happy.
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