About what happened todaySome major was afoot today.
Allow me to put into words some conjecture about what happened today.
In watching BTO's trading behaviour yesterday and especially today, I was struck by the massiveselling by Canaccord and anonymous sellers (possibly also Canaccord), on days when theprice of gold was hitting new record highs, having successfully smashed throughresistance levels. It didn't make sense. The powerful buying demandthat was generated by the climbing POG was used to dump huge positions into themarket.
Later today the price of gold suddenlybegan to plummet - and plummet hard. It literally plunged off of an all time record high,without first teetering or backing off that high. No, it was cut offright at the top. No sign of a rollover manoeuvre, or anything likethat. This is not ordinary selling. This is a bear attack and atakedown.
Then it started to click. The heavy selling I saw in my stock was notprofit taking at all, or locking in gains for a balance sheet. It wasprobably nothing other than short-selling. It is very likely that theseinstitutional, well-connected short sellers knew ahead of time that the price ofgold would take a hammering today. So they shorted into strength, knowingthat a rout was coming. Not only did they know a rout was coming, theyalso helped to create the rout.
Later in the trading day, after the POG started to plunge, I saw that the sameinstitution that had been involved in the massive selling earlier in the day,was now a buyer - albeit at much lower prices than they had been sellingearlier. So they are beginning to cover their shorts at much lowerprices (but are nowwhere near finished). Good for them! But the damage has been done. It will take some time to repair.
Another possible motivator for shorting might have been the bad news that could be contained in the upcoming Q3 report. Gosh, I hope not.
Lesson learned? Watch out for shorting attacks when things are lookingbright. They are shorting because they know something little Joe Six-packdoesn't know. Or maybe just get the he!! out of the markets and stay out!
It will be interesting to see what happens tomorrow.