The four largest silver sellers of silver futures appear to be changing their tactics. Recently, they have begun to reduce their dominant short position. They are buying back the silver contracts that other traders are selling. If this trend continues, and I think it will, we should soon see dramatic advances in the price of silver. For many years, the big short sellers manipulated the silver market to their advantage and enjoyed enormous profits. However, the last two years a rising price and the inability to reduce the short position as easily has left them with billions of dollars of losses in silver. The 4 big shorts have always bought back short positions as they have rigged prices lower, but what makes it different this time is for the first time they are taking sizable realized losses.
They have to get out of this short position without driving the price up and incurring greater losses. Thus far they have been reasonably successful in keeping the silver market from exploding. The price of silver is set exclusively by Comex trading and they ae the biggest players on the Comex. Nevertheless, they have a serious predicament. They face the possibility of a silver short squeeze. They may not be able to get out of their short position before the price of silver jumps to $30 and $40 an ounce. Then they would have to buy enough silver contracts to close out their short position and that could cause the price to double and redouble. Unfortunately for them a lot of people have come to understand how big their short position is and what the consequences could be if there is a short squeeze. To compound the problem there appears to be an unfolding shortage in physical silver. The Reddit silver crowd of 120,000 individuals continues to vigorously advocate the purchase of silver coins and bars and this further aggravates the shorts’ predicament. We should soon see a move in silver that penetrates the moving averages. From there anything can happen and a shocking jump in the price of silver will confirm that the short squeeze is on.
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