As predicted, the shorts overran the longs and a the $.75 drop in Silver was a major retracement of the up lunge. Gold has yet to fall back as far equivalently, but the prospect remains. Liquidity is the main story.
Japan's Yen supplies the hot air lifting the markets - almost any market - to the point that the shorts can load up and the Yen gets unweighted and counters the trend.
With the Yen trading at an 18 month high relative to the USD, the coffers have to move in reverse. Yen gets repatriated, other markets get sold.
When financials lead an uptick - including Citi of the financial hospice category - then this is a suckers uptrend, to be shorted with gusto. The other side of the bend is taking longs on the current downdraft in PM's and related resource stocks.
Anyone going long from here with either core silver or gold options, warrants on mining stocks, or ETF's will find themselves wealthier by a healthy measure come this time next year. Not only do I believe it, but I am following my own advice. These are precisely the moments where you discover your metal - character of strength and decision.
While everyone else runs for the supposed safety of U.S. script or that of any other government for that matter, the wise ones, the Ron Paul supporters, know that the only real safety now involves tangibles - gold and silver foremost.
I am even lightening up on my PM stocks, before I load up heavy in the next upleg.
The lesson is that liquidity is the driver, not a rush into gold and silver. We need liquidity to soft it influence, fear to reassert, and gold and silver to become NEWS.
My theory is - and I will document it soon - that the number of dealers will determine the strength of this gold and silver bull market. If enough avenues open up, then investors will march! More salesmen and women will get the message out to the younger, less informed populace and the rush will begin.
Be the one leading the rush, not the one wondering where it is going.
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