Friday, 4/21, 1:15 pm EST. This came my way yesterday. It’s not good news for silver. See:

“Futures Traders Are All-In on Higher Silver Prices

Precious metals are booming, once again, in 2017.

Gold is up double digits and silver is up almost 15%. But silver could be getting ahead of itself.

Futures traders are all over this trade. They’re now making extreme bullish bets on higher silver prices. And history says lower silver prices are likely, starting now.

Here are the details…

Futures bets on higher silver prices are at an all-time high based on the Commitment of Traders (“COT”) report. This is a warning sign precious metals investors should pay attention to.

Longtime readers are familiar with the COT report. It tells us exactly what futures traders are doing with their money. And at extremes like we see today, it’s a contrarian tool.

That’s because when futures traders all making the same bet, it signals a crowded trade… And the opposite usually occurs. Today, futures traders are all betting on higher silver prices. Take a look…

041917-tws-cot-silver

Again, this is a contrarian signal. The COT tells us futures traders are all betting on higher silver prices. And the smart move is to take the opposite side of their bet.

The only other time futures traders were this bullish on silver was August 2016. The metal fell 24% over four months after that.

Surprisingly, that’s the only other time in history futures traders have been this bullish. And while I’m not calling for a 20% fall in silver, a double-digit decline wouldn’t be surprising.

Again, futures bets on higher silver prices are at an all-time high. As a contrarian, this is not what we want to see. I will be more interested when the script is flipped and futures traders are all making bearish bets on silver.

We aren’t recommending to short silver today. But if you own the metal it might be time to take your gains off the table.”

There you have it, along with the other negative stuff I’ve posted of late.

Harold

Advertisements

3 thoughts on “Some Useful Intel

  1. Gross Domestic Product, 1st quarter 2017 (advance estimate) April 28 8:30 am

    Another environmental factor that could sink stocks if it is aweak number.

    Like

  2. Can’t imagine it’ll be a good number. I’ve been seeing hard data not match registered expectations all along, but there’s new promise on the healthcare insurance and tax reform fronts coming soon! Harold

    Like

  3. Top Trump administration officials will brief all 100 senators next week about North Korea’s provocative behavior, according to guidance sent to lawmakers Friday.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s