gene arensberg says something has changed in the silver market:

As we said, we have not yet had time to do much more analysis, but this much is clear. As of Tuesday, November 9, when silver was red-hot, and had moved as high as $4.30 above the previous COT cutoff closing price, we can say that the largest, best funded and presumably the best informed commercial traders (including the bullion banks and swap dealers) were definitely NOT selling heavily into the price surge for silver.

Indeed, they were reducing their net short exposure instead.

For gold, we can say that the COT report is about as we might have expected on a large increase in the price, with the commercials adding a little less than half of the increase in the open interest net short.

For silver, what can we say, except it is surprising, … it is very highly unusual to see the Big Sellers covering or offsetting a goodly number of their net short positions as silver was moving sharply higher.

We suppose it’s not really a surprise to see the data and the commercial short covering. How else could the price of silver have increased so much by Tuesday without buying pressure coming in from both sides of the battlefield, the long side AND the short side. The long side buying and the short side covering, … but it does make us wonder why the short side is just plain unwilling to sell into this historic rally for silver.

What’s more, for silver this is the sixth consecutive COT report that shows the Big Sellers REDUCING their net short position as the price of silver rose.

That’s very strange, very unusual and downright stunning. Something has indeed changed in the tiny silver market.

http://www.gotgoldreport.com/2010/11/cot-surprise.html