Well, $3.20's been breached...once again...
Interesting how BTO outplunges all other miners. What make IT such a target of shorting?
Also interesting how gold breaks out of its wedge to the downside at precisely the moment the currency wars are going mainstream, after the German gold has been found to be evaporated, the Yen is going to be printed into oblivion, etc. It's always the same story. The more bullish the case for gold gets, the lower it goes.
I used to think that this could not be sustained indefinitely...but maybe it is. How long have we been hearing stories about record purchases of physical? Yesterday, another report of record buying by central banks for 2012. Yet, gold keeps on going down or trade sideways at best
Because all of this is so counterintuitive, it is very difficult to trade this market. PM stocks are often moving in the opposite direction that they should. In any case, this is certainly true for BTO. Who on earth would have thought that the consummation of the merger coupled with news or record production and earnings would call for a 22% plunge in price over just a few short weeks to levels where share price was when the company was only a fraction of what it is now and is going to be? With hindsight it could be said that when all the good news is finally out, prices often go down based on the rationale "how are they going to top all of this"? So was this simply a buy the rumor sell the news story? I didn't expect this because despite all the good news that were in the pipline share price never did very much. It certainly never got anywhere near it's old highs, when gold was much lower and the company smaller.
This is one of the reasons many mom and pop investors have fled the markets. Fundamentals don't matter much anymore. Most trading is done by the parasitic financial institutions - algorithms at that! Their preferred way of making money is shorting. The simple reason is that shorting is more effective at moving prices than going long. When you short you also don't have to put up your own cash, while at the same time, if you are THEM and big enough, you move the price in the direction that will profit you most. The perversity is that it is possible to make a lot more money by driving prices DOWN. Since this is so, why bother driving prices up, which would require you to commit your own capital?
Logically, it would have made sense to go long BTO. Instead they short it, because that is how the easy money is made through manipulative and counterintuitive trading.
It is often said that shorting is a perfectly valid way of trading, because it provides liquidity and because any price drops caused by shorting are reversed when the shorts cover. In a system that works and which hasn't been co-opted, this might be true. As it is, our system is very much co-opted and operated for the benefit of THEM. We are the sheep and the muppets.
How many people have puked up their shares at a loss because they got panicked? Who is going to be the great beneficiary from this?
Back to shorting: Consistent and counterintuitive shorting has a negative impact on market psychology. We have seen this with Research in Motion. When you drive the price down long enough and hard enough, market sentiment turns so negative that even in the presence of positive news and short-covering, the share prices will never return to where they were. Simply put, the shorting, as it's practiced by THEM, has an entropic and corrosive effect on prices and confidence.
When they have driven out real investors they will have to start preying on each other! To some extent this is already happening. The system is broken and THEY are killing their host. This is why things don't trade based on fundamentals anymore.
There is my rant for the day. Hope this didn't depress you too much.
Good luck to all!