Observations:
- Physical demand for silver remains hot
- The silver futures market remains in backwardation. Jim Turk explains it best, Markets (silver market) are not designed to work that way, the higher price is supposed to entice people to sell their physical and hold dollars instead. I think the market is quite clearly sending the signal that people would rather hold silver instead of paper money.
- Retail money, as known as chronic tail chasers, will likely be herded to the short side by fear in the coming weeks.
It's simple. Retail money follows headlines. The headlines communciate fear when smart money wants to buy. The chart below illustrates that smart money is buying aggressively. Retail money, however, has yet to be concentrated, or as we say in America taken to the cleaners. Paper operations are extremely efficient at rebalancing control of the trend into the right hands.
Silver London P.M Fixed and the Commercial (C) & Nonreportables (NR) Traders COT Futures and Options Stochastic Weighted Average of Net Long As A % of Open Interest
Watch the game of control change into June.
