Bear Raid In Gold Results in an Historic One Day Liquidation: Höllenmädchen Merkel und die Straßenschreier
by ilene - May 19th, 2010 3:32 pm
"BANKS HAVE DONE MORE INJURY TO THE RELIGION, MORALITY, TRANQUILITY, PROSPERITY, AND EVEN WEALTH OF THE NATION THAN THEY CAN HAVE DONE OR EVER WILL DO GOOD…LET US DISAPPOINT THOSE MEN WHO ARE RAISING THEMSELVES UP ON THE RUIN OF THEIR COUNTRY." JOHN ADAMS, SECOND PRESIDENT OF THE US
Bear Raid In Gold Results in an Historic One Day Liquidation: Höllenmädchen Merkel und die Straßenschreier
Courtesy of JESSE’S CAFÉ AMÉRICAIN
According to John Brimelow:
"Open interest plunged 21,256 lots, 66.11 tonnes or 3.53%, one of the largest changes in history…"
And this was before the latest round today after this early report.
Open Interest is the total number of contracts for a given future category. When the Open Interest declines on a marked price decrease this is generally considered the net liquidation of long positions. And conversely, on a rising price it is considered short covering. The weekly reports give more insight into who was doing the buying and selling. The report should be daily, and should include specific position changes for traders with aggregate positions higher than 5 percent of any total market for a specific product.
Next Tuesday is the option expiration for Calls and Puts on the Comex gold futures. There was a particularly large concentration of contracts at the 1200 level which we were watching from Monday when we promised you many market shenanigans in the coming option expiration, for both the mining stocks and precious metals.
We also picked up quite a bit more activity on the part of ‘posting trolls,’ who are traders both independent and with hedge funds who set the stage for major bear raids with sensationalistic statements and exaggerated ‘headlines.’
The impunity with which this bear raid was conducted makes us wonder if the CFTC and SEC will ever do anything to clean up these markets. The best defense is not to rise to the bait, and trade in the short term in markets so obviously given to manipulation by large trading interests with fraudulent intents. These markets are tainted.
If the trend is broken it will be time to step aside. Until then we sell strength and buy weakness, slowly. For most it is better to take small incremental positions and then just let them ride the ups and downs.
As an aside, the hysteria, or Straßenschreier,…