The Comex Silver Short Bubble Is Huge
For a initial time ever, sum Comex china open seductiveness exceeded 200M contracts yesterday, settling during 200,273. This means that a entrance Spec brief fist is going to be aroused and substantial. And because isn’t anyone job this a “bubble”?
The final open seductiveness numbers for yesterday are in and they are truly remarkable. Gold, that declined by $7, saw a OI arise by over 11,000 contracts to 430,978. This is a top Comex bullion OI given late March. Since yesterday was a CoT consult day, there’s no doubt in my mind that this week’s news will uncover another estimable and bullish alleviation in a bullion CoT structure. Why? For a Wed-Tue “CoT week”, bullion was down $5 though sum Comex OI ROSE by over 15,000 contracts with 2/3 of a arise entrance Fri-Tue when cost was disappearing by over $25. That’s A LOT of uninformed Spec shorting in bullion and it will expected pierce a bullion CoT to a bullish structure not seen given a early Nov lows final year.
That’s all good and good but, obviously, a indicate of this post is china so let’s get right to it…
Yesterday, as cost was being crushed scarcely 2.5% or 40¢, sum Comex china OI rose by another 4,909 contracts to tighten during 200,273. That’s a initial time in a story of a Comex silver that sum OI has exceeded 200,000 contracts.
- First of all, because now? Why is Comex china OI during record highs when cost is during 5-year lows? And where are all a “bubble callers”? They were out in force 4 years ago with cost in a $40s and sum OI during 140,000. Why can’t this stream time be called a “short bubble”? It clearly is. we theory it’s usually a “bubble” when it fits a account you’re perplexing to promote.
- Let’s do some math. There are 5,000 ounces of paper china behind each Comex china contract. Multiply 5,000 X 200,000 and we get a sum Comex requirement of over 1,000,000,000 ounces of silver. Hmmm. Last year’s tellurian cave supply was usually underneath 900,000,000 ounces and a TOTAL Comex safe shows land of 181,000,000 ounces. How is it even authorised to imitation 200,000 contracts when there’s usually adequate china in a vaults to cover reduction than 40,000?
- On a subject of cave supply, a WGC estimates sum tellurian bullion cave supply during about 92,000,000 ounces. Total Comex bullion OI during 430,978 represents 43,000,000 ounces or about 47% of sum annual cave supply. In silver, as remarkable above a commission is about 112% of sum annual cave supply.
From a CoT standpoint, this is all unusually bullish for paper silver. As mentioned earlier, a subsequent news is due Friday and it will be formed on these numbers from final evening. For a CoT week, china was down 21¢. Remarkably, over this same period, sum china OI peaked by 9,500 contracts from 191,774 to yesterday’s 200,273. From a CoT perspective, we are behind to a really bullish impassioned in silver, too.
And what about a brief fist that we’ve been expecting. OH, IT’S DEFINITELY COMING and a expansion of Spec brief open seductiveness this week usually adds some-more fuel for a fire. All we need is a spark. We roughly had that hint final week after a Fedlines though china unsuccessful to cranky a 50-day relocating normal and fell back. The “doubling-down” on Spec brief positions this week is simply accelerant for a glow once it begins. The draft next can’t make it most some-more transparent for everyone:
In other news today, a Greek conditions is reaching a loyal predicament indicate (http://www.theautomaticearth.com/2015/06/the-only-good-deal-for-greece-is-no-deal/) and a US economy is slipping into retrogression (http://www.zerohedge.com/news/2015-06-24/excluding-obamacare-and-harsh-winter-q1-gdp-tumbled-14) Meh, whatever. The HFT algos don’t give a damn about such keen notions as fundamentals, all they see is a disappearing yen and they sell “gold” accordingly:
I need to get this posted so I’ll usually leave we with this…
In a 3.5 years given MFingGlobal when we strictly quit trading, frequency have we been so tempted to ramble full force into The Casino. This stream conditions is so impassioned and a “short bubble” so HUGE that it is really formidable for me to sojourn on a sidelines. However, on a sidelines we shall remain. This personal limitation does not request to you, however, my dear reader. Best of luck, be studious and ready accordingly.
Courtesy: Turd Ferguson