Commercials have covered? Numisgold at Kitco forum posted:
Commercial short to long silver ratio dropped to another all time low of 1.25 with a net short position of 17K. Maybe still some room to squeeze that down to 11K to 15K. Commercial gold S/L ratio plummeted to a very low 1.67 with a net short position of 104K. That’s by far the lowest of this 7 month cycle. During last year's crashes it got to 130K. Based on previous years, the commercials are now at low enough lows for a solid bottom. But the large specs continue to hold an excess of shorts that is uncharacteristic of bottoms. Who is the smarter money here? I've seen it called both ways.
What was really interesting is that the commercials got rid of massive 37K of net shorts while the specs (managed money and small specs) added those 37K in shorts. Managed money as of Tuesday was as short gold as they ever have been in this cycle. Same comment for small reportable specs. Last time these guys did this we got the $300 smackdown. They have been smart money as of late. But, they got smoked some on gold’s rise from $1420 to $1486 this week. No doubt they were the ones getting squeezed Wed-Friday. They still may be right though. They took another huge position on gold’s short side....not so much silver. Commercial's net short position of 104K is the smallest one seen since Oct 2008 when it hit 92K. So they are definitely at multi-year lows. The commercials have essentially covered. This basically leaves the large specs.
The takedown today in the 11:00 hour ($1475-$1447) was basically the inverse of yesterday's rise during the 1 pm hour ($1455 to $1470). Both had similar hourly volumes though today's was larger. These 2 hrs were the largest volume hrs of the past 9 up days. Still shows me that the large specs still have the nerve to apply the brakes. It seems crazy that they piled on 37,000 more shorts AFTER the bounce of $1321 and less than $1439. Like me, they probably thought the bounce was done at $1439. Some short covering from them no doubt fueled the rally up to $1470-$1486. Still, they had to have been supremely confident that this bounce off $1321 was not the end of this correction before plopping down 37K more shorts. Next week's FOMC will help clear it up a bit.
Last edited by Numisgold : 04-26-2013 at 05:44 PM.
https://www.kitcomm.com/showthread.php?t=41880&page=2805
So while silver shorts have covered, commercials gold shorts (banks, etc) are neutral except for a few but powerful speculators?
Here’s Why Next Week’s Economic Reports Are The Most Critical In Months
https://www.financialsense.com/contributors/sy-harding/next-week-economic-reports-are-critical
If economic reports next week imply a a bias towards QE continuation (or expansion), those neutral positions could switch to bullish. If latest GDP report is a predictor, then economic reports and FOMC meeting may skew towards QE to infinity? Thoughts?
Some weekend listening ...
Technician Tom McClellan: Gold Cycling Up – Summer Doldrums Ahead for Stocks
https://www.financialsense.com/financial-sense-newshour/big-picture/2013/04/27/tom-mcclellan/summer-doldrums-stocks
jmho have a great weekend