This is one just a very few times that I can recall where we have seen sustained strength in the metals during an options expiry week on the COMEX. And the market action this week is all the more impressive given that the USD is rising, and the markets are showing some overall weakness and fear. Gold has always been a safe-haven investment in times of economic uncertainty but in recent years somehow the metals have been capped and driven lower at the exact times when they should be showing strength. I continue to believe in the existence of a malignant anti-gold Cabal that is active behind the scenes to suppress gold and contain investment interest in the PM sector. So to have this positive divergence this week, with gold breaking out and many PM stocks making strong gains, while the rest of the market goes in the toilet, is very encouraging.

With the options expiry behind us and the commercials still short up the yingyang, there is a real potential for another short squeeze similar to what occurred in 2006. This would have the metals soaring higher on investment demand while the shorts try to cover, bidding for the limited supply of bullion that remains. We could finally get the breakout for the juniors that we have been waiting for.

I lost my shirt this week shorting Yamana Gold in anticipation of the usual COMEX takedown. I covered today and am happy since I am fully leveraged on the long side with so many other high quality stocks. The Cartel remains a dangerous and powerful adversary, but I think this time around they have been stuffed. This is not the end of the war, but I think we have a small victory and we could see the set up for a new high in gold before the interim move is exhausted.

With ECU, the stock is close to completing its downtrend line breakout. I was concerned that Op-Ex week would trigger weakness in the trading but it seems the stock has held up well even though silver is still very much under suppression. If we get a breakout in silver in sympathy with the gold move, then its game on.

cheers!

mike