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Dan Norcini continues:
“If you take a look at their position, and you compare it to the hedge fund’s position, they are the mirror opposites. A lot of buying among the hedge funds, and a lot of selling among the swap dealers. It’s kind of unusual to see that (rapid) of a change, when a particular group of traders is net long and they make such a big transition to the short side.
That’s what happened among the swap dealers (in silver). We know where the resistance is coming from in the silver market....
Continue reading the Dan Norcini interview below...
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“We know there is a lot of selling by these swap dealers. But, interestingly, the big commercials, they were doing some short covering this week. I find it odd the behavior among those commercials in silver.
When you shift over to gold, you see almost a similar thing, not among the swap dealers, but among the end user category. What I mean by that is the big commercial group. What you have there, Eric, is very, very odd. I don’t recall seeing something like this over the last eleven years we’ve been in this bull market.
You had the big commercials liquidating a bunch of long positions, 27,700 or so. But then they turned around, and this is what is unusual, they covered or bought back almost the equivalent amount of short positions, 27,300 (contracts). It’s very odd to see that.
They (commercials) were basically canceling selling of the longs with buying of the shorts. The result is they were flat on the week. They had been net sellers while the gold market had been rallying, and the big selling (in gold) was coming from the swap dealers, just like it was coming from the swap dealers in silver.
Very heavy inflows coming in from the hedge fund community, from the general public, and from these other non-reportable (groups). One thing I also want to point out is the general public, their net longs, it’s the largest I’ve got on record right now.
So we definitely have a lot of people among the smaller trader category, who are playing gold from the long side. We need to be alert because of that high position (exposure) there. It doesn’t mean you are going to get a reversal, but it is time we can point that out now because it’s such a high level.
We’ll have to see if there is enough downside to push some of these guys out because I guarantee you there are some (entities) out there who would dearly love to run some downside stops to see if they could flush out the small specs. Those (small specs) are regarded as the weak hands in the market.
They are susceptible to downdrafts in gold. You might have some opportunistic stop-hunting going on by some of the larger pit locals or maybe even some of the bullion banks. But I suspect that would be a relatively short-lived phenomenon.
They would flush the stops, knock the small specs out of their positions, but I would think you would see some pretty good size buying coming in on the part of the hedge funds, who have generally been buying the dips in this market.”
The bottom line here is there are caution flags now being waved in both the gold and silver markets. For those of you who dollar cost average into physical gold and silver each month, if next week is the week you normally add to your holdings, simply continue with that discipline. Do not try to time the market.
For those of you that are looking to add to your mining share positions, just be aware that the XAU and the HUI (mining share indexes) are now up 7 straight weeks. Also, a leader in the silver space, Pan American Silver, has now traded higher for 9 straight weeks. That doesn’t mean they can’t continue higher, but at some point there will be a pull back. It may be wise to add to positions when that pull back takes place.
This was just a small portion of the type of critical information which is covered each week in the KWN Weekly Metals Wrap with Bill Haynes and Dan Norcini. To hear a continuation of this conversation, you can listen to the entire interview by CLICKING HERE.
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
KWN also had a tremendous interview with one of the legends in the business, Keith Barron. He discussed what to expect going forward from central planners and the metals markets. The KWN audio interview with Keith Barron is available now and you can listen to it by CLICKING HERE.
The interviews with Nigel Farage, Ben Davies, Dr. Keith Barron, Jean-Marie Eveillard, Bill Fleckenstein, and Egon von Greyerz are available now. Also, be sure to listen to last week’s line-up of other KWN interviews which included and Felix Zulauf, Rob Arnott, Michael Pento, Gerald Celente, and James Dines by CLICKING HERE.
Eric King
Incredibly Important Developments In Gold & Silver
Today King World News is reporting on incredibly important developments taking place in the gold and silver markets. Acclaimed commodity trader Dan Norcini told KWN that in the metals markets, “I don’t recall seeing something like this over the last eleven years we’ve been in this bull market.”
Norcini has been stunningly accurate in his predictions of the movement of the gold and silver markets. Now the acclaimed trader discusses these incredibly important developments in both of these markets: “This week there was a big change in the (COT) swap dealers position, Eric. They added the equivalent of (roughly) 13,700 contracts worth of selling (in silver). That was a large amount of selling this week (by the swap dealers in silver). It changed their position quite quickly.”
© 2012 by King World News®. All Rights Reserved. This material may not be published, broadcast,
rewritten, or redistributed. However, linking directly to the blog page is permitted and encouraged.
September 22, 2012
