As I sit here looking over the SI on a 1-minute tick basis I can tell you one thing is for sure … the commercials are going to get hosed. If AG-47 manages to pierce 32.00 tomorrow morning (which I guarantee you it most assuredly will!) I suspect our good friend Blythe will have to take a break from her $5,000 morning Swedish Massage and Manicure. Oh yes, mark my words friends, once the metal pierces $32.00 tomorrow there will be an immediate convulsive reaction higher. Blythe’s day will most definitely be one of stomach aches, as that seems to be the only plausible outcome of experiencing a super spike on the long side, when you are indubitably short (perhaps 1/4 of the world annual supply). Tomorrow, the they pay… if only for a moment. The volume today (Thursday) on the morning dip from $31.70 to $31.10 and then back to $31.70 again witnessed some 40,000 contracts trading hands over the course of just a few trading ticks. 40,000 contracts represents 200 million ounces of silver.

The PERFECT storm is brewing. First our dear friends at the U.S. Mint had to go public about the fact that they can’t even begin to fill the 2013 Silver Eagle orders. Then, those monkeys @ iShares couldn’t brush under the rug the fact that SLV magically came up with 572 tons of silver yesterday. Hmmm… nearly 19 million ounces of silver, magically found its way to the HSBC iShares vault. I wonder why? No doubt to provide some extra ammo for Friday’s op-ex. Where there’s smoke there’s fire.

Friday the 18th of January will be an epic demonstration of volatility. If you have been following the SLV call option volume the past 2 weeks (like I have) you are already well acquainted with the MASSIVE volume on the CALL side we have seen particularly in the last 3 trading sessions. It is hard to say if the volume consisted of people BUYING to OPEN, or if the Evil Empire was simply tacking on even further leverage by selling these UNCOVERED (naked) CALLS in anticipation of a raid downward to cover into. When you have the ability to control the futures market intraday through HFT, collusion, and OTC products (as they employ), there are about 36 different ways to SHEAR the SHEEP.

So here it goes, here is my thesis, let’s see how it plays out:

3:00 to 8:30 AM (EST) the Silver Futures price rises steadily, piercing $32.00 briefly in the access market. Come 8:30 EST we see the order book assaulted via an EE-LIQUIDATION-DEATHSTAR routine, without any care for execution price. Expect a singular (or group) entity selling no less than 1,000 contracts into a depthless market. Silver promptly tanks to $31.50, whipsawing as low as $31.40 before regaining its composure. By 9:30 market open, we are back at $31.70. Within the hour, we are over $32.00 again which this time around causes covering, HFT tag alongs, and new spec interest. Within 30 minutes we are at $32.50, where the price will stall and whipsaw between $32.30 and $32.55. At this point there will be tremendous pressure to keep the price in check, as (currently) worthless SLV options will begin to surge (perhaps 1000%) as the volatility brings them near in the money.

I expect the JPM / Citadel / FRBNY traders will throw in the towel and we will close @ $32.45 on silver, and above $1700 on gold.

To all my friends: stay strong, I have the printing press primed and ready and I am doing my best to keep the markets as saturated with new 0% money as I possibly can… but this is far too much for one central printing press to handle. If you think you can handle the heavy weight of the press and the conscience that most assuredly comes with it, well then your friend Bernie B has a job for you! I am now accepting intern applications for entry-level printing press operators. Send resume and cover letter to bernank@comparesilverprices.com for further opportunities.

Your friend in printing,

Bernard B. Shmuelle Rockwell