Monday, February 28, 2011

When trading Ends

Everyday I find a hot stock in the gold/silver mining sector or an oil producer that after gaining huge throughout the day's trading, enters the futures market red.  How could a stock, today Hess, go up all day, only to close with its futures red?  This is big money shorting stocks in order to keep a lid on things.

Last week on numerous occasions I saw ABX have a big day, and come one o'clock, it started out in the red.  Once again, this tells me big money is holding a short position to keep the stock from breaking out.  Who would do this and why?

As I have written, big money shorts the miners to keep spot down.  The miners hold huge reserves, and these reserves are part of their equity.  So if spot goes up, the corporation's equity goes up.  Well the reverse can be true if the scale is large enough.  f someone, I don't know, say the President's Working Group on Financial Markets, shorts ABX and suppresses their equity, their massive gold reserves are thus undervalued, and weigh heavily on spot.  Oh how the little things make all the difference.

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