COMEX - JP Morgan Silver Holdings Are Skyrocketing

Here is an updated chart showing JP Morgan COMEX warehouse silver holdings:

source: Simple Digressions

It looks like it is skyrocketing...

By the way, does anybody have any idea what this huge adjustment is about?

US Stock Market - Expect A Short-Term Move Up

Last week VIX, a fear index, hit extreme readings of around 50 (the red circle on the chart below):

source: Stockcharts.com

In the past such a reading was a clear indication of a short-term bottom in US equities. Simply put, the speculators trading VIX futures changed their attitude into total pessimism but...they were too fast. Look at another chart:

source: Simple Digressions and the COT data

Note that at the end of 2017 the speculators were holding a net SHORT position in VIX futures amounting to 97.2 thousand contracts (in that way strongly betting on higher prices of US equities). Now (February 6, 2018) they held a net LONG position of 85.8 thousand contracts (heavily betting on lower prices of US equities).
Well, in my opinion, the latest change in speculators' attitude was too big and too fast so...I expect a short-term move up soon.

JP Morgan And SLV - What Is Going On?

It looks like JP Morgan is moving its silver from iShares Silver Trust (SLV) to its COMEX warehouse. Look at this table:

data in millions ounces of silver

source: Simple Digressions

Note that since 2017 the changes in SLV holdings match the changes in JP Morgan holdings. This pattern is particularly clear this year - JPM increased its holdings by 7.9 million ounces of silver up-to-date while SLV reported a decrease of 7.7 million.

Last year JP Morgan added 37.3 million ounces to its COMEX warehouse while SLV reported a decrease of 20.7 milion.

Now the question is what it is all about.

By the way, there are 127.3 million ounces of silver at JP Morgan's COMEX warehouse. (as of February 5, 2018). To give you some comparison - the annual silver production is 886 million ounces (2016) so JP Morgan (or its clients) hold around 14.3% of the world's silver production. 

US Dollar - Is It Close To The Bottom?

It looks like we are very close to the end of a bear market in the US dollar. Look at this chart:

source: Simple Digressions and the COT data

The grey bars represent the net positions held by big speculators trading US dollar index futures. Note that the current position held by these traders is SHORT.

However, despite the US dollar index being at its lowest level since January 2015, the net short position is not that large as it was at the end of November 2017 (the green arrow) when the previous bottom in the US dollar index was printed (the red arrow).

In other words, the speculators are not that pessimistic about the greenback as they were in November 2017. In my opinion, it is a common pattern visible during bottoming phases. Hence, expect the US dollar to consolidate or even go higher soon...

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