Wynter Benton Report Card Semester 2

Ever since Wynter Benton came blazing back on the scene for a second round, a number of claims and statements have been made. Let's see how they check out (my grading).
This is an important post for me because it ends a train of hope I once had that the Wynter Benton Group might have been able to take on the forces of the mighty money machine. For the record I do believe that the group is a real group of traders, but I now believe that most of what they put out there is either misleading or dishonest and serves no real distinction beyond that of any message-board chatter.

For now, my mind is changed about Wynter Benton (and Robert LeRoy Parker was right about them). I am no longer their friend. I will not reference what they say in order to help time any trades, and we recommend that others don't. I still don't know what they hoped to achieve with their messages - other than to try and move markets in a direction favourable to themselves - but their latest round of messages dug themselves into quite a hole which damaged their credibility somewhat. Here are some of the points made since they reappeared on the scene, and my notes on each.
  1. The JPM Derivatives Bomb date (the topic of the very first 'Benton returns' message) was originally set to go off at 60 days of silver above $36/oz, which on the charts starts somewhere around July 12th. The actual date was not specified and discussed at length by the guys at tfmetalsreport (forum), who determined that this must have been referring to calendar days (because it wasn't specified). wynter_benton then posted more recently on the 16th September to say that it was in fact trading days, which would extend the deadline for JPM to somewhere in early October. The bomb is supposed to manifest itself in the form of a significantly higher price of silver, and a significantly lower shareprice of JPM when they report their quarterly earnings (and in theory show losses in derivatives). wynter still expects JPM's shareprice to be as low as $20 sometime in October. The end of the world folk always have an issue when a date is specified and not reached. The share price of JPM would have to have some serious pummelling in the next couple of weeks for the story to have any credibility, however note that the current downdraft in the markets may be a desperate attempt to pull silver below that crucial $36/oz mark.

  2. Without Stops? Wynter did warn that the morgue would become very desperate, and advised 'do not put stop losses on your futures positions'. Presumably this is to prevent the price movers from shaking out a bunch of stops and arrest the momentum of any sudden fall in the price. Fair enough, but this is dangerous advice for any monkey trying to play the 'skim the value from other players' game in the futures markets. Who does this benefit and can you really take their advice at face value?

  3. A Sovereign Central Bank will apparently shortly announce they are accumulating Silver as a reserve asset [link]. Okay, that's fair enough but the idea is not new. In fact, I wrote a bit about this here and here (back when Amber was reading our board). While I still like the idea - until we see some kind of official headline/statement from an actual sovereign central bank, then the news is of no better quality than SGS saying that the central banks are awash with tungsten bars.

  4. The 'Not enough physical Silver' meme gets repeated quite a few times in the new messages, along with the threat of them 'busting the Comex' if silver goes below $36/oz [link]. A year ago I would have believed this, but these days I am well aware that there is a lot of physical silver available, and that the market is not really as tight as it is made out to be (for example, take a look at the logistics of Eric's Delivery). wynter_benton also takes the line that taking physical off the market will hurt JPM [link]. As far as my research has taken me, the opposite is actually true - a tighter physical market gives more power (over price) to the people who have the most of it ** ... specifically the bullion banks and (yep) JPM themselves as the custodian of SLV. Just remember that the inventory of SLV was as high recently as 360 million ounces, whereas it is currently about 320 million ounces.
There is also the timing of the Greece default as called by Benton's sources, I won't discuss it but in order for the sources to be credible, the announcement about Greece's specific terms of default must be known by end of September. When the market has already priced in a default (reflected in the greek bond market) I find the Greece default news pretty unremarkable.

So I guess we just wait and see until the end of September unfold. I actually do hope my pessimism is misplaced, and Wynter delivers the goods but I'm no longer betting on it. Also, there IS a wildcard. The size of the silver market is still very small and could be cornered very easily by whoever had deep enough pockets. For example, the entire stock of SLV can be purchased for about 14 billion dollars. But therein lies the rub - this team is playing with less than that amount. And if that's the case, I wonder what makes them think they will win their battle with the FED.

Notes and links:
  • Original Report Card Semester 1
  • Discussion Forum at TFMetalsReport, which discusses the posts
  • Yahoo Boards wynter_benton messages
  • ** re: my claim that 'a tighter physical market gives more power to the manipulators', this is based on my research to date and is entirely debatable (pretty much a separate topic). My primary thoughts are that the bullion banks can make millions of ounces appear and reappear in the market at will and this is made all-the-easier if there are no large chunks of bullion not in their control.


Louis Cypher said...

Morning Warren,
They have a new message up.

Bill Downey has this to say as a follow on from yesterdays caution message "GOLD TRENDS PRICE UPDATE SILVER

Silver ---- I am changing the stop on the silver emini Dec trade long from 39.75 ---------- new stop is 39.20 intra day stop .

Could be exiting at the low --- but I've given it enough time - and don't want to be long this weekend on leverage in this environment. I'll return next week if stopped out-- when things look better. Right now --- with the situation going on in the markets --- i'd just as soon be watching. If I change the stop again -- I'll send an email. I may exit at any time here ---- will let you know if i decide to.

Time is 2:49 am EST Thursday Morning --- and 7:39 am london time"

Warren James said...

Louis, yep. Their latest statement is what prompted to tip the bucket. While I recognise that life doesn't always happen as we plan, they basically used the 'no-QE3' as a homotron excuse to wind back everything they have been talking about and then state they were ambivalent (and split) about the price movement for the metals in the short term. It is clear to me that they were waiting for (1) Greece default and (2) QE3 to support their 'we are putting a run on silver' statements. When neither came about, they adjusted their story quick-smart.

p.s. I am really bullish on silver and I think we just saw the bottom in both gold and silver for the next little bit. But I'll do this leg without Benton in tow. I think they debunked themselves.

Warren James said...

Looks like JPM did get their waterfall selloff in silver - $2.50 movement down? Awesome.

Actually, from the Benton viewpoint, this is still bullish for silver - we're only $1 away from $36, at which point wynter_benton and the leader are going to 'bust the comex'. Can't wait.

Warren James said...

And they are still at it [link].

Silver went over $36 on July 12th. 60 trading days is around 4th October, so yes according to their story, a dip below $36 now, does do a reset. No mention of their promise to bust the comex though, looks like they are wimping out of that one as well :)

Louis Cypher said...

Now I am certain this guy is something new. At no point in the past did WB describe themselves as Silver believers. They were always traders looking to make a buck. They were careful not push people into following them into a trade. Just the opposite in fact.

They are simply repeating rumors and gossip from blogs. Time to put this one to bed. They don't know up down or sideways when it comes to trading today's market. One more post should complete the hole they have been digging and we can throw Wynter Benton's body bag into it. Sorry WB

Anonymous said...

Silver spot at 35.88 as we speak.

Warren James said...

Yep, and another statement from their group, though this was written earlier in the day before the $36 breach.

So ... next big headline should be about comex going bust, courtesy of the wynter benton group. It will be easier now, since silver is cheaper than yesterday.

Not being bitter, just that their narrative is completely chewed up at this point. The only saving grace for their story is that it explains the desperate dash to $36 close to the 60-day mark (and a possible motive for Ben's announcement).

But as for their sentence 'some say we are revising history..' damn straight it's a revision. During those 60 calendar days there were countless questions and speculation from observers about the difference and there was ample chance just to simply clarify. Sorry Benton, still an 'F', purely on execution. Bring back the old team, they managed the legend better. If you really have any spunk left, get Amber to comment here to set the record straight.

Robert LeRoy Parker said...

Warren James said...

Quick post-benton update for anyone discovering this thread for the first time. Benton claimed their 'sources out of greece' told them 'The announcement of the default will come before the end of September' [Link].

I imagine even the insider information circles are chock full of deliberately-placed disinformation too - i.e. there is still the chance the traders themselves were misled by other parties.
But regardless, since September passed without such an announcement from Greece, just wanted to point it out to back my main point in the post (highlighted in red).