Say what you want about the Cartel, and the huge outstanding short position on ECU, but these guys are pros. They sell strength and buy weakness. I think we have already seen the lows for the year for silver, and that means we have a nice tailwind for all the producing juniors. High silver means increased production revenues, and this attracts new money into the sector. New money means stocks like ECU will have more buyers willing to risk a position. And that is bad news for the shorts.

ECU has been held back by a large short position for a long time. The shorts have been reduced immediately before and during each of the upside moves for the stock. And the short is increased immediately before and during each of the corrections for the stock. So I think its fair to assume that this little company is a part of the larger agenda to restrain silver and keep excitement to a minimum in the sector. I do not believe the majority is going to be correct all of the time, and I do not accept that the shorts can be timed almost to perfection when to buy or sell. This is a coordinated manipulation in my opinion.

The good news is that the market depth today is as bullish as I can recall. There are token batches of shares for sale all the way up past $1.20 while huge blocks of several hundred thousands of shares are lined up on the bid. I think we can infer that the shorts are among the bidders, as they look to trim their exposure ahead of the next big move. I think silver is telling us that the Cartel is in strategic retreat here, and we may see another 30-yr high before the end of this month. ECU is going to trend higher along with it.

The market depth is just a snapshot of investor interest and it too is subject to tricks and games, phantom orders, and iceberg blocks that do not show up. Things can change fast. But based on what I see today I do not think the stock can be pushed much lower and the path higher looks relatively unopposed.

cheers!

mike