In his latest market update, Ted Butler’s calculations show that we are witnessing a historic moment in time: the silver short position by one big player in the market has never been as concentrated as today. Please do not confuse relative concentration with the absolute volume. Unfortunately, regular investors and inviduals feel the consequences of this situation as this too large concentrated position sets the short term direction of the silver price. This is exactly the long term premise from Ted Butler, and the core of his silver manipulation thesis. There is no other publicly traded asset or commodity that has such a concentration.
We were granted permission from Ted Butler to make the following excerpt public.
I would estimate JPMorgan’s concentrated short position to be 27,500 contracts as of the cut-off. I had expected JPMorgan to have covered more in this report and the raptors not to have bought as much as they did. JPM may have set a record of sorts in that it holds nearly 90% of the total commercial short position of 30,900 contracts. In other words, without JPMorgan, there would be a total commercial net short position in COMEX silver of less than 3500 contracts and no one could begin to allege price manipulation. Instead, I don’t believe there has ever been such a large concentrated position in history in which one trader held virtually the entire net position of all the other commercials. In a very real sense, it is JPMorgan against the world of silver.
Needless to say, there is a stark contrast between the raptors’ near record long position and JPMorgan’s record short concentration relative to the total commercial net short position. It seems clear to me that this juxtaposition and its resolution is at the heart of how silver will behave price-wise from here. Since the tech funds have continued to plow onto the short side, we should be approaching the maximum number of how many tech fund shorts can be created from here along with further speculative long liquidation. If the raptors continue to buy on lower prices (which appears likely considering how aggressive they have been so far), the question becomes how will JPMorgan cover the bulk of their short position?
Readers who are not acquainted with the volumes mentioned by Ted Butler should read two recent pieces we published: Crash Course In Short Term Gold & Silver Price Forecasting and What’s next for gold & silver – some signals. Both show recent data about open interest and short positions.
The most read articles from Ted Butler:
Bullish on Gold But JP Morgan Excessively Short in Silver
Why The Silver Manipulation MUST End by Ted Butler
Ted Butler: A Manipulation Timeline
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