Sunday Discussion: Comex is Dead

Week: Normal Variation Lower

By Day

1. short covering rally

2. long liquidation

3. closed

4. Squaring up

5. Squaring up

• The comex futures are “impaired” (bank term). That is why noone big is trading them

• Comex Deathwatch: Zoltan's Crisis of Collateral Manifest

  • impaired= illiquid due to little marketmaking

  • Comex is broken similarly but to a lesser extent like the LBMA

  • Comex is a vault with a futures contract attached now, The whole complex is unwinding

  • Thats not to say it is shutting down or it is useless. It is to say that the data is less reliable on the futures side, and simultaneously, the moves can be bigger due to lack of bank participation

• Further manifestation of the death of Comex

• Where did those flows go? Some left, some went to shfe, some went OTC, some play options only

• Bank Shorts- covered

• Bank longs- sold

• Long Funds- added

• Shortt funds- added

• Macro Discretionary longs- closed

• Mac D shorts- added

  • Chop city as players run for exits

  • Decent fund to fund options trading

  • Everybody continues to get out of the pool

  • Banks are increasingly ignoring their duties as marektmakers in fact trading OTC and front running buy side flows on the exchange.

  • One can assume not only is the exchange dying, but someth8ing else is getting ready ot be launched and they must keep their powder dry for it.. but what… Tether product… physical for sure.. but where/what