Yesterday's market action a liquidity event?

[pmbug]

Tyler @ ZH intimates that yesterday's massacre in equities, bonds and commodities was indicative of freezing dollar liquidity. Today's elevation comes courtesy of rumors that the ECB is going to circumvent their charter and run the printing presses.

Should Germany prevail and constrain the ECB - effectively dooming the Euro - we may yet see a massive downward move in commodities and everything else if yesterday was any indication.

However, crazy moves at the COMEX and reports on central bank gold purchases indicate that demand for physical bullion is accelerating.

Are we getting close to the decoupling (where the physical market for gold/silver diverge from the paper/futures markets)?

 

[DSAbug]

China raised margin requirements on silver.

 

[DoChenRollingBearing]

Yesterday was a crazy day that I think will be noted in history as one of the days when the dirty secrets were most revealed. My understanding is that HUGE amounts of money have been and are still being stolen. And yet, nobody wants to do anything about it.

Liquidity is drying up. Who's up next? France?

I will join you, friends here at pmbug.com, in examining what is going on and how we can protect ourselves.

 

[DCFusor]

Well, the falling price of gold indicates supply is greater than demand at current prices. "The ticker is the truth." Accept no substitutes - because no one else will. Could be a great buying opportunity soon, because that supply/demand imbalance will swing the other way soon enough. But Gold's going below the 50sma (only about touching now), and I will wait for it to cross going the other way to get longer - again. A nice money maker done that way.

 

[DSAbug]

Well, the falling price of gold indicates supply is greater than demand at current prices. "The ticker is the truth." Accept no substitutes - because no one else will. Could be a great buying opportunity soon, because that supply/demand imbalance will swing the other way soon enough. But Gold's going below the 50sma (only about touching now), and I will wait for it to cross going the other way to get longer - again. A nice money maker done that way.

They did this right in front of OPX. We have support from 1680 up to around 1710.. We've bounced off 1710 a couple times already. If any of you guys read jesse's cafe americain, he's been on the OPX sell offs for well over a couple years now. it's so predictable it's sad.

Even without opx, technical indicators showed we were overbought short term and so a drop was expected.. Just not that fast. We are now in a buy zone on a few indicators so a 1-2 day bounce is a reasonable expectation. However, a few more down days and bottoming around T-day is much more likely,

 

[ancona]

I think the Thursday massacre was more about the margin hike in Asia than anything else. One also has to wonder when the COMEX jacks margin again. The folks holding a shitload of shorts are getting desperate, and the CME reaction to MF Global is indicative of a malfunctioning market.

Although we have seen massive volatility this summer and fall, it will go thermonuclear when people start trying to take delivery of physical in significant quantities. While my opinion may not be popular, I think it to be accurate. Anyhow, with end-of-year reporting right around the corner, all guns are pointed at the "Christmas consumer", because if stores take another big hit, the shit will hit the fan in January.

I'm going to sit back and watch it all unfold in real time, because my crustal ball is cracked and in the shop.

 

[DCFusor]

Looking over the past charts, I don't see any huge correlation to the downside with opx myself. Usually that big a dump that quick is well correlated with someone having to sell a lot double-quick - and if you're the patient aspergers type, you find out in their next quarterly filing - mystery all gone. The smart money doesn't do that except in dire need as I've mentioned on my site re manipulation. It's kind of hard to flood the market with so many willing buyers unless you catch them unaware, and since they tend to be smart money, they'll let the price fall and buy in smaller orders so as not to push it up - yet.

I've shorted PMs, I admit it - but never much and gawsh, never for long! Who'd hold any amount of shorts long-term given the charts? They'd have to be awfully stupid, and usually that sort doesn't have the money (for long). By that I mean "official shorts" not simply having less in the vault than claimed - now THAT might be real short, and might be what we're actually talking about here, in fact.