by VBL Authored by GoldfixSubstack
On Friday, after a week of commenting on Silver in three different interviews, and doing some trading we could no longer ignore the percolations:
"[T]hings are no longer adding up in silver. [E]very rationalization of market externalities is screaming something is wrong. Someone is getting played (other than us) and it's not obvious who" 10:06am · 10 Sep 2022
So we did a little more analysis for GoldFix Subscribers on Sunday.
Silver CoT Analysis:
If you are truly serious about Silver as a trade-able contract and want to understand a little more about the market structure while getting timely insights into the current run up in the metal; Then this is for you. If you have the time and want to be a better informed trader/investor in every market with Silver as your jumping off point - Then this was done especially for you.
This Sunday’s Founder class spent a large time on Silver as it is on our radar for multiple reasons. What follows is almost 90 minutes of conversation on particular traits of Silver including: Short squeeze behavior, Backwardation2, SLV borrowing costs, CTA behavior, and a ton more that is going on right now in precious metals in general, and Silver specifically. And an actual short term committed market call was made for Monday with rationale why, where, and how:
"Buy it on the open 10 cents lower (physically), or buy it on the open 10 cents higher via futures. The next 50 cents may be lower, but the next $5 should be higher. The EFP, CoT, and other factors like the SLV lease rates are telling you this"
Background:
Last week we did 3 interviews on precious metals, economics, and commodities in general. The first of which by Tom Bodrovics. of Palisades Gold Radio featured Tom Luongo and Keither Weiner was a live spaces event converted to Youtube for rebroadcast. In each interview there were extensive comments on Silver as it had finally become very interesting of late and near some type of short term tipping point. More on the other two interviews in a future post. The timing seemed to fortuitously gain momentum as the week went on until Friday when we made the comment at top.
So this Sunday at 2p.m. ET we tried to pull the Silver content of those interviews together into some actionable advice for Silver traders since the market had been on our radar all last week, and really got interesting on Friday. The podcast covers the metal from Fundamental, Flows, and Technical perspectives. Here is a 10+ minute clip of that 85 minute discussion without interruption discussing the SLV borrowing issue and the CTA/CoT short positions.
What follows are some slides covering the core concepts discussed Sunday. Enjoy. 1- Silver is up 6% right now. We do not expect it to go up in a straight line forever. We’re not screaming Silver squeeze. We do see the tide turning in a more meaningful long term way now however.
2- Borrowing rates for SLV shorts have skyrocketed recently...
3- While speculative funds have gotten even shorter and Commercials have now turned net long ...
4- Meanwhile in Gold, shorts continue to add on the fund side but are not panicking yet...
5- What the CTAs do in Copper, they do in Silver much more recklessly...
6- Silver CTAs tend to stomach big rangy moves for long periods and then cover in a furious exit when their bankers tell them to. But this time the EFP is keeping Spot's bid well above the Comex Futures levels...
7- The GoldSilver Ratio behavior was very surprising the last half of the week last...
8- Moor Analytics Gold Technical Levels were a good proxy for resistance Friday...
h/t MoorAnalytics.com
9- Silver's recent pattern had shown indications of algorithmic accumulation/ buying...
Subscribers continue here
Poster Comment:
Obviously, I did not post ten interesting graphs. But the Vatican wants all assets inside its own bank firewall in just 17 days and silver is the one most likely to go up at this point.