As the month of May draws to a close, just one more note on the premeditated massacre that took place between May 1st and May 17th.
Remember and never forget that the Comex is owned by the CME. A failure to deliver by the Comex would result in a failure and endless lawsuits against the CME.
By the end of April, it was clear to almost everyone actively paying attention that the Comex was failing. To this date, it is still failing. The total amount of available, deliverable silver stands at a record low of 31,000,000 ounces. This number is down from over 100,000,000 ounces just two years ago. In an effort to squelch demand and buy time, a deliberate and premeditated attack of Cartel selling and CME margin increases drove price down nearly 35% in 10 trading days.
Do not believe the nonsense that volatility caused the margin increases. This is not a chicken vs egg argument. The margin increases created the volatility. Period. End of story. The CME "used" the volatility they created to justify a total and unprecedented 5 margin increases in 9 days. Breathtakingly bold manipulation and, when contemplated from a distance, only offers further proof of the desperate situation in which the CME/Comex/Cartel finds itself. The CME's decision today to lower margins on equity futures contracts, despite contrary volatility evidence, proves once and for all their active role in managing our "markets".
Therefore, we must resist the urge to be complacent and/or overconfident. Yes, The Truth is on our side and, as always, The Truth will win. However, the C/C/C has shown that they will not go down without a fight. Can margins be raised to 100%? Yes. Will they? Who knows? Maybe, and we must be prepared for that and any other eventuality.
In the end, as Santa says, your best option may just be to simply continue stacking your physical. Let traders such as myself guarantee an early grave for ourselves by stressing over the daily machinations. Believe me, you'll have just as much fun following the markets and watching to see if Ole Turd is right again even if you don't have any "skin in the game". Don't be afraid to simply buy physical on every 5% dip and avoid all the other nonsense. You'll be much happier, I can assure you.
To that end, The Wicked Witch seems obsessed with keeping silver below $39. We've seen this behavior before and it usually ends badly for her. I'm convinced she will lose this battle, too. The fundos are stacked too high in our favor. Silver will soon trade through $39 and then $39.50. Before the month of June ends, I'm supremely confident that it will trade to $43, maybe even $45. Could I be wrong? Of course. Maybe margins will be raised to 200%. Who knows? But, in the short term, gold is strong, crude is up, the euro is rebounding and the dollar is rolling over. This is a recipe for silver strength, not weakness, so keep the faith and let's see what tomorrow brings. TF