Not Buyin It

The big story overnight was an article from the Financial Times that JPM had covered their massive short position in silver. If you've not yet seen it, here's the summary from ZeroHedge:

The US regulator, the Commodity Futures Trading Commission, announced in September 2008 that it was investigating complaints of misconduct in the silver market, although it did not name specific entities.
However, JPMorgan said in a statement: “It is absolutely incorrect to say or imply that the Nymex, CFTC or any other exchange or regulator has instructed or asked us to reduce our position.” The bank declined to comment on whether it had reduced its position in the silver market.
The price of silver has risen more than 70 per cent since mid-August to hit a 30-year high of $30.68 a troy ounce last week on the back of a surge in investor buying and a rebound in industrial silver consumption.
In two previous reviews of the silver market, the CFTC has dismissed claims of manipulation. Most analysts say there is little reason to believe the price of silver is being systematically manipulated.
But Bart Chilton, a CFTC commissioner, said in October that he believed there had been “fraudulent efforts” to “deviously control” the silver price. He did not name any party.
Publicly available data on individual traders’ positions are sketchy. In a speech last Wednesday, Mr Chilton said that “earlier this year, one trader held more than 40 per cent of the silver market”. He declined to identify the trader.
The CFTC’s Bank Participation Report shows that one or more US banks held a gross short silver futures position equal to 19.1 per cent of the total number of outstanding contracts in early December. In January the share was 30.2 per cent.
The CFTC only reports data for the US silver futures market, a small corner of the global derivatives market for the precious metal, which is centred in London and largely traded via private over-the-counter deals. The data also do not cover transactions in the physical market.
Analysts and traders said that JPMorgan’s large short positions on New York’s Comex exchange, a division of Nymex, were hedges for the bank’s long positions in physical silver and London’s over-the-counter market.
JPMorgan has invested nearly $3bn over the past two years in its commodities business led by Blythe Masters.

Sorry, but this is all too convenient. I'm not buyin it. Just last week, Bart Chilton places in the public record that one trader has controlled, in the past, up to 40% of the Comex silver market. The next scheduled hearing is on Thursday. On the Tuesday before, this article appears. I call BS. Its interesting that you at least have an admission of guilt and past sins but I don't, for a minute, believe that the story is honest. Its classic misinformation. Write some truth into the story so that the rest of the story becomes believable. 

On to today, after rising overnight, the EE commenced their expected raid at 8:28 EST. (I say expected because we discussed it here yesterday and even Harvey mentioned it last night.) After reaching a high of 1409 at about 7:00 am, Blythe began her pre-market takedown operation at 1406.60 at 8:28. By 8:32, it was 1398.50. $8 in 4 minutes and JPM Is out of the precious metal manipulation game? Believe what you see, not what some LBMA shill writes in London.

In silver, same deal. We hit 29.99 just before 7:00 am EST and we have a last of 29.52 with the selloff stopping right at 29.50 or so. Perhaps we should look at this chart again from yesterday, hmmm?

Are the BoS laying down support again at another $1.50 higher? Time will tell but we may be onto something.

I'll try to keep a close watch all day as Blythe has clearly signaled her intention to raid the metals today. The battle should be fun to observe. Again, as long as you're not trying to day-trade this market, just sit back, relax and enjoy the fireworks. As with all games, its much more enjoyable to be a spectator when you know the participants.

9:45 EST: One more thing I just thought of, can't you see how this plays out today?
1) FT bs JPM article overnight
2) PMs rally
3) takedown begins as per usual at 8:00 est
4) metals sell off all day on Death Star
5) both get another Outside Reversal Day painted on their charts
6) All the usual a-holes come out of the woodowrk to declare the silver run as finished. It was all "trumped up" "internet spin" that drove silver from 20 to 30 when, in fact, it is trumped up JPM spin and manipulation that is driving the PMs down today.


This will probably work for a day, maybe even a week, but the BoS will keep up the pressure. Do not sell your insurance today!