Silver: The House Always Wins, Until Now
Posted: Mon Oct 11, 2010 7:32 pmSomething has drastically changed in the silver market. The banks that once controlled the price of silver are now closing positions at a loss...Regardless of the actual reason the commercial shorts have begun to bleed money. And when blood spills, sharks will circle. Hedge funds and traders that never even thought of silver before will begin to squeeze the shorts. If the big banks don't quickly regain control of the silver market they may lose it forever.
While it can be speculated on how short covering could impact the market, a short squeeze could feed upon itself as it attracts capital. In five trading days of buying a net 3286 contracts, the price of silver rose by $1. However, the commercial banks are still a net 62,127 contracts short so at that linear rate it would take them 94 trading days to cover with a silver price of roughly $117. The resulting losses would be around $15 billion. Of course, markets aren't linear and after the second or third week of covering traders would begin to purposefully front run and squeeze the commercial shorts. So its unlikely that the positions could be covered that low or if at all. Unfortunately, those who were hoping for a correction to accumulate more silver may not get it here as a price reset may be on the horizon.
http://seekingalpha.com/article/229283-silver-the-house-always-wins-until-now
$117 SILVER - 90% coins at 83.7X face: SILVER dimes at $8.37, quarters at $20.93, and halves at only $41.85..... Would be nice, wouldn' it??
While it can be speculated on how short covering could impact the market, a short squeeze could feed upon itself as it attracts capital. In five trading days of buying a net 3286 contracts, the price of silver rose by $1. However, the commercial banks are still a net 62,127 contracts short so at that linear rate it would take them 94 trading days to cover with a silver price of roughly $117. The resulting losses would be around $15 billion. Of course, markets aren't linear and after the second or third week of covering traders would begin to purposefully front run and squeeze the commercial shorts. So its unlikely that the positions could be covered that low or if at all. Unfortunately, those who were hoping for a correction to accumulate more silver may not get it here as a price reset may be on the horizon.
http://seekingalpha.com/article/229283-silver-the-house-always-wins-until-now
$117 SILVER - 90% coins at 83.7X face: SILVER dimes at $8.37, quarters at $20.93, and halves at only $41.85..... Would be nice, wouldn' it??
