Hi Scruff!

I think Bill Murphy has called the short term trading right again. He suggested that the gold takedown was related to a very large treasury offering this week, something like $30 Billion. To make things look more attrative for the bond issue, they walk the dollar higher and take gold and commodities down. This creates the illusion of safe-haven money flow, which is positive sentiment for a large treasury auction. My guess is that the same criminals that were behind the market intervention also decided to score some easy cash by shorting the hell out of the PM stocks, which were overdue for a correction anyway. Today the treasury issued is completed, so that is why we have the move higher in the PM stocks, as those shorts are covered in advance of letting the dollar slide again. The US talks a strong dollar but in reality it is only talk that is there to support it. Obama just this week announced more spending, which will require more debt issuance, and probably put greater pressure on the dollar going forward.

So all of this nasty trading for the PM sector is in part due to a normal corrective phase, and in part due to a more severe intervention effort from the usual criminals to put lipstick on the treasury pig. We got a bit more of a rapid downside move than usual, but I would put money on the fact that the sector will trade much higher within two or three sessions, as evidenced by the short covering rally. The action in the HUI often tells us what the crooks are going to do to the metals. The HUI is up, so watch the metals recover soon.

cheers!

mike