- The Cat’s Out of The Bag
by Ted Butler, Butler Research, https://silverseek.com/
In the latest Commitment of Traders report (COT), the issue I have nearly beaten to death for decades – the concentrated short position in COMEX silver futures – took center stage to a degree that had me check and recheck the data. It seems the 4 largest shorts in COMEX silver doubled down and added more new shorts in the reporting week ended Tuesday than in any other week (save one) in the last few years. The four big silver shorts added an astounding 6,672 new shorts (33.4 million ounces). This is the largest concentrated short position by the 4 largest traders in 13 years where JPMorgan wasn’t one of the 4. If you are looking for a reason why silver was capped at $30 and declined in the face of visible physical shortages in the retail market and extreme tightness in the wholesale (1,000 oz bar) market, then look no more. The price capping was caused by concentrated short selling on the COMEX and highly illegitimate and easy to prove selling in the silver ETFs.
Let’s not beat around the bush, the silver price was rigged lower by the 4 big shorts. The evidence is clear. The COT report provides highly objective and mechanical analysis of the government’s own market data. What’s the motivation of the 4 big COMEX shorts? They are in a fight for their financial lives. They added with reckless abandon to their manipulative short positions this week in a desperate attempt to stem the tide of surging silver prices. They are much like an individual maxing out his credit cards in a desperate attempt to stay solvent. The big shorts deserve no sympathy because they have been engaged in illegal and manipulative practices for decades and they have hurt all too many unsuspecting investors. We had the highest trading volume in history, by far, on the COMEX and in SLV and the big shorts were so effective they both gained only a dollar.
Starting on Thursday, January 28 and ending on Monday, Feb 1, the total trading volume in shares of the big silver ETF, SLV, soared to the highest three-day level in history. More than 545 million shares were traded. Prices closed on Monday up $3 from Wednesday, Jan. 27. Subsequently, the share price of SLV fell back by $2 at the close on Tuesday, Feb. 2. For all the record trading volume, the price of SLV (and silver) only had a net gain of $1 to show after the dust settled. As a result of the record trading volume, some 110 million ounces of silver were added to the holdings of SLV, with a value of roughly $3 billion. The three-day deposit of physical silver was, by far, the most in history. The deposit equaled 5.5% of the 2 billion ounces of silver in 1,000-ounce-bar form in the world.