In Ted Butler's Archive


Years ago, I suggested that one way the 4 big shorts in COMEX silver futures could reduce a good-sized chunk of their concentrated short position was to wait until the raptors (the smaller commercials) built up a large long position that the 4 big shorts could rush to buy on higher prices before the managed-money traders also rushed in to buy. The raptors have demonstrated a reliable pattern of selling out long positions on higher prices in order to book profits. While the decades-old pattern of the commercials vs. the managed-money traders has continued to play out, the raptors have been running rings around the big 4 and big 8 commercial shorts. The recent sharp drop in silver prices over the past few weeks featured extraordinarily large commercial buying and managed-money selling – as would be expected. However, the vast majority of the commercial buying (85%) was by the raptors, the largest percentage in memory. I have been surprised by the lack of big 4 and big 8 short-covering to this point.

I suspect that the 4 big silver shorts would very much prefer not to hold the largest concentrated short position in the one commodity that is the cheapest in the world and be done with a predicament they would prefer not to be in. Something has to be holding back the 4 big shorts from attempting to buy back more of their short position. And it goes without saying, it would take some type of underhanded collusion or plan for which the COMEX commercials are famous. Further, it might be a plan that involves only one of the big 4 shorts, undoubtedly the largest short which could be holding 25,000 contracts short.

A possible reason the 4 big shorts have largely stood aside and not tried to buy back shorts more aggressively is that they wanted the managed money traders to sell (and sell short) as many contracts as possible, along with allowing the raptors to add as many long positions as possible because the big 4 thought that would enable them to buy back many of the big 4 short positions on a price rally – and before the managed money traders rushed to buy as well. What I’m suggesting is highly speculative. For sure, it has never happened before. Still, something has to account for the fact that the 4 big shorts have been non-participants on the buy side on the silver price smash – something never seen to this extent before. If my speculation is correct, the ramifications for silver prices are profound. If the 4 big silver shorts move to buy back short positions on higher prices, it would be an abrupt end to the decades-old silver manipulation.  It would be the most significant price event in silver in modern times and a game changer of epic proportions.

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