Commercials Covering Gold & Silver Shorts. Here Is The Good News

http://kingworldnews.com/commercials-covering-in-the-gold-silver-markets-here-is-the-good-news/

Staggering Physical Gold Demand Now Overrunning Shorts

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/10/24_Staggering_Physical_Gold_Demand_Now_Overrunning_Shorts.html

Sinclair - Shorts Are About To Get Mauled In The Gold Market

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2013/3/11_Sinclair_-_Shorts_Are_About_To_Get_Mauled_In_The_Gold_Market.html

Sprott: Shorts May Need To Deliver 40 Million Ounces Of Silver

http://kingworldnews.com/kingworldnews/KWN_DailyWeb/Entries/2012/12/1_Sprott__Shorts_May_Need_To_Deliver_40_Million_Ounces_Of_Silver.html

Kaplan Fox Sues JP Morgan and HSBC on Behalf of Investors for Silver Futures and Options Contract Losses Caused by Market Manipulation

The lawsuits against JPMorgan and HSBC for the suppression of silver prices are mounting. There is no one else to thwart aggressive buyers. Shorts are being taken to the wood shed. This couldn't happen to a better lot.

http://www.marketwire.com/press-release/Kaplan-Fox-Sues-JP-Morgan-HSBC-on-Behalf-Investors-Silver-Futures-Options-Contract-Losses-1347390.htm

SLV and GLD concerns

Here is another article raising questions regarding the GLD and SLV ETF's.

http://www.theundergroundinvestor.com/2010/10/now-that-the-cftc-has-declared-silver-manipulation-occurs-can-we-get-the-sec%E2%80%99s-mary-shapiro-to-investigate-the-likely-fraudulent-slv-and-gld-etfs/

JPMorgan downgrades ARNA

Two weeks ago, JPMorgan upgraded shares of ARNA to Overweight. This morning, JPMorgan downgrades ARNA to Neutral, with a price target of $6. Sure, shares have appreciated 80% since the upgrade, but this appears suspicious. Could it be they have clients that need to cover their shorts--or longs that missed the run up and would like to enter at a lower price? Not that I am suggesting there is manipulation at work--since it's illegal, but the timing suggests opportunism.

http://www.businessweek.com/news/2010-08-02/boyd-charles-river-humana-mosaic-penske-u-s-equity-movers.html

http://www.canadianbusiness.com/markets/market_news/article.jsp?content=D9HBFN6O0

See disclaimers in the side bar.

Disclosure: long ARNA shares, added to my position this morning.

Thanks for the gift, JPMorgan and shorts.

The Traders Who Make The Big Money

The Traders Who Make The Big Money

Why they refuse to do the same with gold is really difficult to grasp unless of course they are fearful of government regulators sniffing around their business. Maybe the word has gotten out that this will be the case with any hedge fund manager who dares to try to force the shorts to delivery the gold. One thing along this line – China or Russia nor mid-Eastern interests are under no such constraints and could break the back of the bullion banks tomorrow if they chose to do so. That they have not signifies that they are not through acquiring cheap gold yet.

Congressmen shorted the markets too

While deservedly accusing Goldman Sachs of shorting structured financial securities they in turn sold to clients, members of Congress also allegedly shorted the market during the financial crisis, profiting from the market declines. I have no problems with legal profits from trading/investing. But if you bet wrong and lose big, don't expect a bail out. Having said that, these government interventions are creating some very strange interactions.

http://finance.yahoo.com/news/article/109442/congress-members-bet-on-fall-in-stocks?sec=topStories&pos=5&asset=&ccode=

Good news for ARNA shareholders

http://finance.yahoo.com/news/Arena-Pharmaceuticals-prnews-489018725.html?x=0&.v=1

The US FDA formally accepted the New Drug Application (NDA) from Arena Pharmaceuticals (ticker symbol "ARNA") for their anti-obesity drug Lorcaserin. Although this is good news for ARNA shareholders, the shorts will take this normally bullish development as an opportunity tank the price per share down in order to profit on the decline, as well as enable long institutional investors to accumulate more shares at a lower entry point. That's the Wall Street playbook.

Disclosure: long ARNA shares.

It could be lights out for Cramer's thestreet.com

Biotech investors have had a hate/hate relationship with thestreet.com's biotech "analyst" Adam Feuerstein, as he has bashed promising companies, probably as an accomplice in bear raids against microcap biotech companies, orchestrated by shorts and hedge funds. Well, Jim Cramer's thestreet.com is about to get de-listed in an ironic comeuppance. Perhaps Cramer should have hired an analyst with a biotech background, instead of a political science hack.

http://www.zerohedge.com/article/taking-it-streetcom

He failed as a hedge fund manager before becoming a cheerleader on CNBC. And now he has failed as the CEO of an investment company. Mr. Cramer better keep his daytime job at CNBC. Booyah!

Gold chart

http://www.the-privateer.com/chart/gold-pf.html

The chart for gold still looks bullish, with support at $975, and $875, should $975 not hold. In other words, the long-term bullish trend is in place unless support levels are broken. Either way, expect violent corrections, as the commercial shorts vigorously attempt to put a lid on prices.

The short USDollar / long precious metals trade is getting crowded, so corrections won't be unexpected.

Disclaimer: this chart only depicts previous price levels, and does not indicate future performance. Investing is risky, so consult with your professional investment advisor. Do your own due diligence.

Disclosure: I am long physical gold and silver, and long gold and silver mining shares.

Funny post from an ARNA long:

I thought this post on ARNA's message board was funny--and fitting:

Shorts are pounding on your door hatch.

You're in your bunker with a gazillion ARNA shares.

You hear the screams and cries of the torched shorties outside.

"PLEASE FOR THE LOVE OF GOD HELP US!!" - Sauve9

Manipulation

In a sure sign that shares of DNDN were manipulated from $24 down to $12 before being halted in the afternoon, shares opened above $25 in after hours trading after the halt, after a great conference call. Shorts got a reprieve, cross trading with other funds, market makers took out the weak retail longs, and Wall Street was richer, even those that bet wrong. The losers were the longs who had stop-market orders filled.

There should be an investigation by the SEC, but my hopes are dim. NASDAQ did a quickie investigation for possible "erroneous trades" before declaring all trades stand. How does one make a 2 million share "erroneous trade"?

As for DNDN itself, I'm looking to take some profits off the table, and keeping a core holding for long-term growth. If folks held on with no stop loss orders, you're still green (up) today. I told you to expect fireworks today!

Who is shorting gold?

Regarding the gold shorts, I've read JP Morgan, HSBC, and Goldman Sachs were shorting gold futures, artificially driving the price down, while at the same time hoarding the physical bullion on the spot market at a lower price. Ironically, JPMorgan Chase and Citigroup analysts are forecasting $2000/oz gold. Looks like manipulation, especially when you factor in a ten-fold increase in short positions. Someone on the inside knew what was going on with Fed easing and tightening.

I'm not sure if it was just big money centers--I think some of the commercial shorts were mining companies themselves. If they short it and the price plummets, they've locked in a profit as the short contracts increase in value when gold declines in price. That's why gold producers use it as a hedge in the case of falling gold prices. If they sell short the futures contracts, and prices rise against them, they are forced to cover at a higher price, but then their gold inventory also increases in value, negating the loss from short sale. In other words, they profit either way--as long as they have the gold in inventory. Without said inventory, they are "naked" and must realize the losses within 5 days--or until they deliver the physical product.

If indeed manipulation is going on, it is not only illegal, it will not be sustainable. Eventually, the Fed won't be able to save the shorts, as physical bullion becomes even scarcer, and buyers insist on delivery, instead of some "shadow" paper delivery against some vault. Gold experienced backwardation for the first time ever in December--the spot price was higher than the forward contracts. In other words, buyers wanted delivery NOW--and would not sell at ANY price, as fear has gripped the markets. Under normal conditions, a contango exists, where forward contracts command higher prices. I think this backwardation is very bullish for gold, and the fact that mints are out of inventory is indicative of that.

Also, I've read statistics where central banks, especially in Europe, are no longer selling their gold inventory. If the Chinese government steps up and purchases tons of gold like they have threatened (their ratios are much lower than the US's and Europe's), that will absorb inventory and drive prices higher also. And India is already the world's largest buyer of gold, up to 20%. With the Pakistan thing going on, I can't imagine them wanting more rupees, instead of gold, which has become the de facto currency.

Bottom line: MV = GDP, and as long as the Fed provides easy credit (interest rates can't get much lower than 0%), and as long as the Treasury prints trillions of dollars, the money supply M will be poised to catalyze inflation. But once the velocity V of capital flows thru the economy, it will provide the stimulus our economy needs, but potentially kicking off hyperinflation. In other words, once bank balance sheets have been restored, they will start lending again. We would have avoided another Great Depression, but God helps us when we get runaway inflation a la the 70's. Having an extra $8 trillion floating around in our economy will prove inflationary, and interest rates will soar. Treasury bondholders with longer maturities will get crushed, as the Fed can only influence short-term maturities (T bills). With higher interest rates, the government won't be able to pay off its huge debt obligations, and we'll have stagnant growth for years. We are experiencing a credit crisis because investment and commercial banks are insolvent. When the markets realize the US government is also insolvent, all hell will break loose. The government has compounded a multi-billion-dollar debt crisis into a multi-trillion debt crisis.

I hope I'm wrong in this logic chain, but this playbook has been repeated many times before when fiat currencies are under attack by central banks. I just don't see any other outcome when your debt is almost as large as the size of your economy.