Silver is up 113.9% since 21 weeks ago.
SLV 9/18 24.5C – 79 (Will roll these to mid October by EOM)
SLV 9/30 26C – 30 (Will roll these to October within next 30 days)
SLV 12/31 27C – 25
******************************Required Prerequisite Reading******************************
Silver DD #1: https://www.reddit.com/r/wallstreetbets/comments/i5m4ri/real_talk_slv/g0qcer1?utm_source=share&utm_medium=web2x
Silver DD #2 : https://www.reddit.com/r/wallstreetbets/comments/i6l0o2/weekend_update_silver/
Hey Gang, just wanted to provide a quick recap of whats happening with Silver ($SLV) this week.
For starters – go back and read DD#1 and DD#2 – I won’t be re-covering anything already typed out in those.
(1) This week was exactly what we shouldn’t be TOO surprised to see. August is typically a thin month on volume and banks shove the price around a lot. Monday was an absolute rape fest. BUT – this doesn’t change the FUNDAMENTALS of what is going on in this shiny rock. Banks came in on Monday and flushed the shit out of everyone so that they could buy to cover at a lower price – expect to see more of this in August.
(2) Congress failed to get another Stimulus Check out – so fuck everyone I guess. Now they are on vacation for the next 2 weeks, so the soonest anyone can see a check would be like, 9/18? ( https://www.cnet.com/personal-finance/stimulus-check-2-update-when-could-the-irs-send-your-payment-now-what-we-know-today/ )
That aside, we all know the Fed WILL continue to print money – they even tell you when/what/where they are buying $100bn/month of assets. ( https://apps.newyorkfed.org/markets/autorates/tomo-results-display?SHOWMORE=TRUE&startDate=01/01/2000&enddate=01/01/2000 )
Two big things are coming to public announcement. #1 is that the Fed is going to let inflation run as they try to inflate away the debt, and #2 is yield curve control. The funny thing is that if you look back to 3/23 whn JPow announced that he was letting QE to inifinty run, they already started YCC in June. They will keep interest rates super low (look at mortgage rates right now) – but they have been doing this for a while already. Notice how since mid June, the 10 year Bond has seemed pretty range bound of .5-.75? (https://www.tradingview.com/x/8z1jLmJO/). The next FOMC meeting is 9/16 and JPow will officially announce this to everyone – because they have already been doing it.
This will cause negative REAL interest rates(it already is, people are just retarded) – and people will continue to run from bonds and into metals. Metals are pet rocks and you can’t eat them – they pay 0% but that beats out negative rates for a foundational instrument for things like Pension Funds, Retirement Funds, endowments, etc.
(3) So given all of this, there is still a MASSIVE run on metals. There are a RECORD amount of people that are keeping their open interest buys all the way to delivery. This is going to cause massive issues as Silver has been rehypothicated so much that when they have to actually square the books against the amount of physical silver available – all hell will break loose to the upside on price. Once this happens, mobs of people will show up wanting metals. Call your local coin/metals dealer and ask them what the demand has been like for silver over the past month.
So because RECORD amounts of people are standing for physical delivery, and the banks are naked short, they are having to start unwinding their positions. Today, the COT showed that Large Specs have the smallest net LONG position since 6/18/2019 on Gold and Silver. The Spec net long ratio is the smallest its been since 7/9/19 (very bullish) – they are reducing the amount of paper being traded to try and ease the pain when it hits.
Banks are still having to unwind their short positions. We can see it in the COT report, and we can also see it in the price action. After the NYMEX closed, we saw a massive buy cover of Silver contracts from 4-5pm EST.
Even more indicative of banks covering their shorts and adding to longs is to look at the options Market. This week alone, SOMEONE bought $750k of SLV 9/18 $30c ( https://twitter.com/unusual_whales/status/1293637436367613954 )
SOMEONE bought $690k of GDX 10/16 $46c ( https://twitter.com/unusual_whales/status/1294334426265063425 )
and SOMEONE bought $714k 12/17 GLD $220c ( https://twitter.com/unusual_whales/status/1294334426265063425 )
Unless this was that crazy rich mattress dude – it smells like banks are taking their losses on the futures contracts as they cover their shorts, and are going long in options to recoup costs. The banks know that they can’t be naked short on Silver anymore because people will show the fuck up and demand metal. Once word gets out that they can’t take physical delivery – the price will moon. MOST silver that is mined is consumed on industrial applications (phones/TVs/electronics) – there isn’t a whole lot out there for speculative purposes. This makes it a thin market and subject to price movement.
September is a Delivery month for COMEX metals (March, June, Sept, Dec). If these banks don’t figure the shit out they will have to start delivering metals to contract holders starting on 9/1. A bank can only sell and deliver so much metals before they have none – so they are having to cover. September is also the first month the traders are back from vacation and the BIG BOY volume shows up. So keep an eye out.
(4) Buffet dropped JPM today and bought Gold Miners. JPM is currently under DOJ investigation AGAIN for price speculation on Silver. Maybe Warren doesn’t wanna be associated with a company like that or something, IDK? JPM is learning a VERY expensive lesson that when there is a pandemic, global FIAT currencies are crashing(like the DXY), and there is a run on physical metals – you can’t be naked short on paper.
Because we will show the fuck up.
I don’t know what the rest of August looks like, but expect volatility and big price spikes and flushes. Get some October calls for slightly OTM and sit on them. They WILL go red and they WILL go green, but patience pays off here. I expect September to be a BIG month for Silver as physical deliveries take place and they will have to start squaring the books with actual physical metals. You can’t paper trade 2x the amount of Gold above ground when people show the fuck up and demand metal.
(1) There is still a run on metals. Turkey is currently in the middle of a run on gold (https://www.reuters.com/article/us-turkey-currency-gold-analysis/gold-rush-at-turkish-bazaar-a-test-of-trust-for-lowly-lira-idUSKCN25A0GW?utm_source=twitter&utm_medium=Social )
(2) Banks are still having to unwind their positions and cover shorts, and go long.
(3) I’m tired of writing this shit. Y’all can join Craig Hemke’s site for $20/mo and get all this shit spoon fed to you on a daily 30min podcast. TFMetalsReport.com