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"Our view is that gold and silver are in the formative, difficult for many traders to believe, stage of a nascent, but powerful bull market. We believe that gold and silver are beginning to price in something ahead … something we cannot yet see clearly, but nevertheless is real enough to underpin this market with ample buying pressure, even into managed sell downs.
Update 1: Adds additional commentary in several paragraphs regarding our expectations for gold and silver.
For evidence to support the stealthy bull market getting underway, we confidently point to gold and silver’s resilience in recent trade, the very powerful bottom-looking signature now forming in gold shares indexes, with inverted head and shoulders breakouts showing, clear outperformance by silver over gold of late, with the metals nearing a more favorable part of the annual cycle just ahead as July goes off the board.
One clear indication that has come from this review is the fact that even with an aggressive, high volume sell-down last Monday and Tuesday – one that had the appearance of a wholesale exodus by the trend-following Managed Money traders – we find instead that they more or less held their ground and much of their net long positioning (as detailed above). Doesn’t that amount to a sell raid failure for the short side? … Surprise!
...Most anything can happen short term, but at some point gold and silver are going to catch a tail wind strong enough that those attempting to prevent runaway breakouts could be overwhelmed. It is in such cases that the trader community on the COMEX becomes its most cutthroat and merciless. If the other traders sense a trapped large trader or group of traders, you know, maybe one with a way-too-huge-short position in a rising price environment as an example … well, let’s just say that all traders consider it a duty to pile on and make them pay… Watch for it.
This is certainly not, repeat not, the kind of environment we would personally feel comfortable on the short side of. Not even for a lightning fast minute. Got that?
At http://www.gotgoldreport.com/2014/0...short-silver-too-vulnerable-to-a-squeeze.html
