Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

December 1, 2020 | Comex Shutdown

No one has followed the silver market trading mechanics for as long or as closely as Ted Butler.

The managed money traders (hedge funds) and the large reporting traders have a combined long position of 244,000 net gold contracts (24.4 million ounces). This just happens to nearly match the concentrated short position of the 8 largest commercial shorts of just over 249,000 contracts. I’d ask you (and the regulators) to think about this. Here we have the two largest long categories of traders (managed money and other large reporting traders) which collectively number 190 traders on the long side as holding, essentially, the same size position as the 8 largest shorts. This goes to the core of my manipulation-by-concentration allegation, an allegation the regulators haven’t responded to in more than a decade.

It’s even worse in silver. If the 8 big shorts didn’t exist there would be no commercial short position at all. In the past, I have characterized the short position of the 8 big COMEX traders as being aligned against thousands of long traders on the COMEX.  This documented and verifiable short position is the most manipulative position of all time.

This unprecedented concentrated short position in COMEX silver is highly illegitimate. It is not held by mining producers, and it is not backed by real metal. Finally, ask yourself in this current day who in their right mind would choose to be massively short silver? After you exhaust any list of legitimate explanations, you will be left with a short list of illegitimate explanations – all pointing to price manipulation.

It is precisely the blatant nature of the concentrated short position in COMEX silver that dooms it. It is only a matter of time before it is sufficiently exposed to the point where anyone looking to make a buck will see the potential for big profits in silver. It will only take a few big buyers to launch silver upwards. This is a question of when, not if.

And for why the 8 big traders remain so massively short in silver, it’s not like they can simply click the heels and be free from the position. There are only two ways to close out a short position – deliver against it or buy it back. Attempting either will crush the shorts. As for why they have waited so long to choose either, who rushes to take a big loss? As far as how the 8 big shorts have fared since Friday’s close, they’re ahead for the week, but still deep in the hole from where I started keeping score in June 2019. For the week so far, they are better off by nearly $500 million or so, leaving them still stuck with more than $12.4 billion in total losses.

My sense is that it wouldn’t take much to set off a price explosion based upon everything I look at. In fact, it’s more a case of what is taking so long? As for why silver hasn’t exploded by now, look no further than the concentrated short position of the 8 big shorts.

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

December 1st, 2020

Posted In: Butler Research

Previous: «

Post a Comment:

Your email address will not be published.

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.