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The Raptors Rumble

By: Theodore Butler

-- Posted 3 July, 2007 | | Discuss This Article - Comments: Source:

The remarkable saga of the raptors continues. Iím referring to the commercial traders on the COMEX, aside from the four and eight largest traders in the Commitment of Traders Report (COT). To summarize, over the past year or so, a pattern has developed where the smaller commercial traders in the large commercial category seem to be aggressively stepping in front of the dominant shorts in silver (and gold).

The recent sharp sell-offs in silver and gold do not disprove my theory, at least not yet. In truth, this last sell-off was so severe, especially in silver that I thought I might have to lay the raptor theory to rest. After all, silver sold off so sharply that it set a record for how much it traded under the 200 day moving average. I thought the big T. rex commercial shorts may have turned the tables on the smaller raptors by engineering the price so low that the raptors might be forced to sell. I was fully prepared, in that event, to title the article, "The Rexís Eat The Raptors." Maybe that will be the title some day, but not today.

Instead, the raptors accounted for a disproportionate share, once again, of the dealer buying on the big break. Of the total commercial net buying of 7000 silver futures contracts, the raptors accounted for 5500. As a result of the raptor buying we hit some new milestones in the most recent COT, for positions as of 6/26.

The raptors now hold an historic net long position of some 14,500 silver contracts. The four largest traders are now short more than 104% of the total commercial net short silver position, also a record in percentage terms. Likewise in gold, some new records were set. The gold raptors now hold an historic net long position of 46,000 contracts and the eight largest traders now hold a net short position that is 155% of the total commercial net short position.

Given the extreme levels of concentration in silver and gold, and given the strong connection between concentration and manipulation, I am at a genuine loss as to why there is not more discussion on this issue. I see that plenty of people have picked up the significance of the COTs in general, but very few have dared speak up about the concentration levels, which are a key component of the weekly reports. As a reminder, concentration is reported because it is the prime requisite for manipulation, not because I say so, but because the CFTC and commodity law says so.

On another issue, the turnover in COMEX silver inventories continues. Over the past two weeks, some 23 million ounces have been received and 18 million have moved out. Of the amount received, 19 million ounces were in the ScotiaMocatta warehouse. It does not appear to be the same silver being transferred. Now that the first three days of deliveries have taken place on the big July contract, it does not appear that much of the silver received in the ScotiaMocatta warehouse was earmarked for delivery. I still have the opinion that the most probable reason for the in-movement was to camouflage the out movement. Itís as if someone wants to hide the fact that so much silver is being withdrawn. Of course, if my speculation is correct, that should be against commodity law as well.

Another One Bites The Dust?

There may have been some small amount of prior warning, but I am still taken back by the sudden resignation of Reuben Jeffery, chairman of the CFTC. After less than 2 years as chairman, his resignation was announced the same day he departed, June 27, leaving three vacancies on the five-member Commission. Whatever happened to giving proper notice and helping to find a replacement when one departs a job? Iím also surprised with the lack of media coverage of the event. Of course, I canít say itís related to the silver manipulation, but not because silver isnít manipulated. If the resignation were unrelated to the silver manipulation, it would be because the CFTC is (still) clueless.

-- Posted 3 July, 2007 | | Discuss This Article - Comments:

This article is brought to you in part by Investment Rarities Inc.

Last Three Articles by Theodore Butler

Warnings Ignored
4 September, 2009

The Voice Of The People
25 August, 2009

Walking the Walk
20 August, 2009

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