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Monday, April 15, 2013

Gold Crash

Below chart from Tiho Brkan shows that gross speculative short positions are at their highest levels in decades. Furthermore, last week public opinion (an amalgamation of a handful of surveys courtesy of sentimentrader.com) reached the lowest level since at least 2004. And bullish percent miners via $BPGDM is at 0 - as it should be in strong downtrend.

 During summer 2008 SLV lost about 50% and October 2008  looked liked no bottom I ever seen.
Infact it looked like Silver goes way down from there. Position in SLV bought anytime during that bear would still be profitable btw.
Fast forward to today.
Buy low - sell high?
This is definitely low (which can become even lower), it just have to slow down...

Specifically, I will not be buying today. All PM's are facing margin liquidation which will happen after 2pm. We had it on Friday, and today futures traders are facing a total loss of their position.

What is going on? I have a theory. For one, if you know that several countries (not hedge funds) may be in position to sell gold in order to repay money they owe to you? Will you help them sell gold at highest prices to somebody else, or at lowest print directly to you?… and blah-blah-blah (add your favorite conspiracy theory).
But really I simply think that this support level was too widely watched, accumulated alot of stoploss orders and now we have a cascading effect. Gold-bugs suffered for too long, capitulating. May last for days-to-weeks, may be over tomorrow

We are looking at transfer of shares from weak hands to strong ones.
Rivers of blood!
Don't get swept away...:-)

Some funny-mentals. Top panel is US based, bottom is Canada. I don't want to touch any South Africa, Peru,etc. All these are profitable! At first glance - I don't see any massive shorts, I do see inst ownership, dividends, low debt and low Price-to-Book on most of these.    HMMM - is an understatement.!

Here is what crazies are up to:



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