Friday, January 20, 2012

Market Moves: A PWG Tale

Today was a huge day for silver.  Long term this is bullish, but due to the way stocks have been ramped coupled with economic weakness, I think it might have been a pump to gain same leverage.  The President's Working Group is the largest hedge fund there is, and they go about their business front running big moves.  I like to think almost every bankruptcy lately has been front run by the PWG.  They have the insider information to know which corporations are weak, and they can make good money front running theses moves.

The same goes for PMs.  They can game these markets, earn a buck, and then use the revenue to go back into the market and lower the price.  This is why silver appreciated to $50 so rapidly.  The PWG lifted their shorts, went long, and then put the shorts back on the top.  There are other market fundamentals that matter, but my point is that this Group does front run big market moves.

Considering there is still a lot of shorts on silver at $25, I would think that there would be one more dip to that number.  Yet the game is getting long in the tooth.  Miners have under performed (due to the same manipulation) and I imagine that on gold's next rise retail investors will finally move in.  I think that the average investor is beginning to think about investing in gold.

Another reason I think that silver may test $25, gold may test $1550, and the Dow may test 11,500, is that the Fed wants another official QE program.  We do have POMO, OT2, and FX swaps, and I consider all of them forms of monetizing debt, but the Fed wants a bigger program.  I don't think it will be next week, I do think it will be the next month or the next.

So we are approaching an inflection point, and silver pointed to that move today, but I don't think it will be for at least a few weeks.

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