The recent release of the Commitment of Traders Report shows a striking surge in the net long position of LargeSpeculators in [Silver] futures. Two weeks ago, Large Specs were net long 14.88% of total non-spreading openinterest. Last week, they jumped to a net long position of 29.16%, a 96% increase and a 15-month extreme.Commercials were net short 24.82% two weeks ago and increased that stance to net short 37.14% last week. Aswe’ve said many times, there exists no indicator whose track record is unblemished. COT data can provide falsesignals. But the big jump in Large Spec buying suggests something big is brewing in silver. The three-waveadvance to the $26.17 high on May 5, which ended when silver met the top of the (a)-(b)-(c) channel, suggeststhat the next significant move will be down. It will mean that once gain, Large Specs made a large wrong-way betat an inopportune time. A key level is the $26.17 high. If silver rallies above this high, the exact opposite maydevelop. Instead of a significant decline, silver may be at the forefront of a major advance, in which case the LargeSpecs will be positioned correctly. So, our bearish forecast will remain intact so long as silver does not close above$26.17. If it does, a significant rally could be underway.
IVR Price at posting:
5.1¢ Sentiment: Buy Disclosure: Held
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