Från Ed Steers blogg: caseyresearch.com/gsd
Yes, it is possible, given how close we are to the lows of the year that more salami slicing to the downside, designed to generate more technical fund short selling, could be seen. But it is just as possible that the salami slicing is over with. More than possible is that JPMorgan will look, at some point, to feather their own nest with an explosion in gold and silver prices, given how they are currently positioned. That’s what smart crooks do. – Silver analyst Ted Butler: 28 December 2013
Well, it doesn’t get much more blatant than that. I couldn’t make up a price scenario like yesterday no matter how hard I tried. If JPMorgan et al were fishing for a bottom, I’d say they found one, as I doubt very much that prices could get much lower than this—or stay there for long if they did. You saw that happen yesterday—and you also saw how quickly it reversed itself.
As Ted Butler says, in order for JPMorgan et al to go longer or cover more short positions, they have to find either a technical fund or small trader to either puke up a long or go short, so they [JPMorgan et al] can gobble up either the long contract puked up, or buy the long side of the short trade. These two types of traders are the only ”food supply” for JPM et al—and why they continually attempt to engineer lower prices. Once ”da boyz” can no longer entice these traders to go short anymore, or puke up more longs, the bottom is in. And if I had to bet a sum of money, I’d guess we saw it yesterday.
But the question at all market bottoms is always the same—what will JPMorgan et al do on the subsequent rally? They, as always, are 100% in the driver’s seat—and what they do, or what they’re instructed to do, is all that matters. If you’ve been reading this column for any length of time, it’s a situation that we’ve been in many times in the past—and Ted Butler and I always pose the same questions. Will this time be different, or will it be the same old, same old?