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There’s malfeasance afoot, I think, and I urge you to take caution.
Gold just dropped precipitously — $25 since this morning– without the dollar turning much at all. Yesterday afternoon, there was a similar sell down in the silver markets– flash mob style — even as physical COMEX inventories are reported at five year lows as of late May. (Hat tip to Jesse’s Cafe Americain).
What this tells me is that there are some big players throwing large boulders out there in these markets, trying to scare some people out of positions for various reasons — both optical and monetary. The Fed has a big incentive to knock down the POG and POS, both as a cat’s paw for their inflationary plans and as a warning to Congress to “raise that debt ceiling or else.”
Moreover, the current physical readings portend that myriad shorts in silver especially could be in deep trouble despite the five-time increase in margin requirement by the COMEX last month. That means small players could get stomped on in this elephant dance, and I am recommending everyone get to at least 50% cash here.
If we are really stepping into a D-wave event, this will get us started on getting all the way back to bare core positions (about 25-30% is where I like to hang personally, but you all need to decide on your own risk levels). If this is just a head fake, we may have some opportunities to pick off some slower moving miners at deeper discounts.
Be well and be careful.
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yes senator,lots of boulders indued.physical.the time to strike again is now.
Your guidance is much appreciated, Senator. I’ll sold out of SLV puts this morning at break even, but I wish I would’ve held them a little bit longer. I was relieved to get out of what I perceived to be a poorly entered trade.
You almost need to stride both sides of the stream these days.
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If you’re on both sides of a river, you’re probably already wet.
I hate dancing elephants.
But I held on to my NUGTs through the raid, back to break even on the bounce.
JG, my little hree spec plays are getting slaughtered while MCP/AVL are up, what gives and are you holding?
AVL, QRM and GDLNF (play microscopically)
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Admittedly, I’m a little daft but if the silver shorts get stomped wouldn’t that be good for us longs?
“Moreover, the current physical readings portend that myriad shorts in silver especially could be in deep trouble …”
Or maybe I’m misreading the above sentence? Are you saying the large elephants are shorting silver, thus bringing it down and stomping the little guy?
Normally, “shorts in trouble” is a good thing because that indicates a squeeze is imminent.
In the case of silver short — the largest of those being JP the Morgue — it’s a different story.
Usually, that means some government do-over is imminent.
“Barack Declares Silver Illegal” or some such happening.
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gotcha.
well, whatever caused the drop in gold this morning, it’s steadily bounced back throughout the day. Still taking a haircut on most my miners but it’s more of a “Chet” from “Weird Science” than a full-on John Candy from Stripes.
http://tinyurl.com/26gpjhr
http://tinyurl.com/2btlxs4
As I said… it’s a mistrustful market.
Whole lotta shakin’ goin’ on.
Could be more.
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Conspiracy theories in the PM markets? no way, Jose Gint ! 😉
Unloaded all my AGQ for a $25/share loss. Oh well. Easy come easy go. At least I’ve got a little more cash to throw back in if the silver price really licks the bag.
You’ll get it back on the next upswing…
And mooooooore.
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One of your best post Jake! I can’t get my reduced sized cranium around how to trade QRM or why QSURF’s ticker was “re-offered” (?), any explanations are welcome?
Pink sheets to Amex
The Fed is trying (partly) to create what Dr. Krugman characterizes as “useful inflation”. In the Keynesian mind, this will increase aggregate demand thereby rescuing government Keynesians from their follies. Of course, all they have really done is pull demand forward.
If this is indeed the case, then I cannot imagine that the Fed would want lower PM prices. High PM prices provide the illusion of success to the Fed’s current fruitless mission. Would it be too prosaic to suggest that PM prices dropped because people were selling them? Regardless, I’m all ears for further expansion on your “big incentive” theory.