KSR Capital calls BS on Gold price drop - declares paper manipulation at work

Excerpted from: http://www.scribd.com/doc/93775585/Paper-Gold-and-Silver


The Accumulation Distribution Line developed by Marc Chaikin is a volume-based indicator designed to measure the cumulative flow of money into and out of a security.Chaikin originally referred to the indicator as the Cumulative Money Flow Line. As with cumulative indicators, the Accumulation Distribution Line is a running total of each period's Money Flow Volume. First, a multiplier is calculated based on the relationship of the close to the high-low range. Second, the Money Flow Multiplier is multiplied by the period's volume to come up with a Money Flow Volume. A running total of theMoney Flow Volume forms the Accumulation Distribution Line. Chartists can use this indicator to affirm a security's underlying trend or anticipate reversals when the indicator diverges from the security price.We think this, along with other technical indicators, is screaming BS on the paper gold and silver game. If you take a look at the chart below, you can see that the indicator has confirmed this bull cycle as money has continued to move out of paper assets and into the physical. Currently we see an extreme divergence.

Attachment 2801


Attachment 2800

The recent lower volume in the metals and the related mining shares are not confirming this move lower. If the gold and silver price were to have kept a correlation with this indicator we would currently see close to $1900 and $50 silver.Our experience tells us that this type of disconnect usually ends in violent corrections to the norm. In this case it could mean that we are witnessing the straw that breaks the paper gold and silver games’ back.There is an even more extreme disconnect in the related mining shares. Today wewitnessed a silver producer lose 10% ($15 million in market cap) off a $250k marketsell order. The shares are now in the strongest of hands; the problem is that most of the strong hands are fully invested at this point, allowing an emotional mom and pop liquidating their 401k position due to mass fear in the markets to knock down the price significantly.

This is long but a fantastically informative read:

http://www.fofoa.blogspot.com/2012/05/inflation-or-hyperinflation.html

Another classic from FOFOA.

I will provide a brief executive summary later for those who do not like to read long articles.

Mamboni,

I first "fell in like" with Marc Chaikin back in the day (almost 30 years ago) when he invented the ORIGINAL CCI, aka Commodity Channel Index. Its name has been stolen by a wanna be indicator with the same initials but does NOT have Chaikin's stellar algorithim backing it.

Chaikin is the real deal.

Glad to see you have him in your arsenal of truth speakers about the TA skinny inside the markets, a/w/a interpreter of "the numbers."

Good service you provided with your post here.


beefsteak

gold's final words: My game was strong and my money was long I really made this business pay

Have no doubt in your mind: central bankers and politicians have their eyes squarely on the price of gold. As I type these, they are sellin short and stomping on gold to extinquish today's flash rally. They may win some battles, but they are going to lose the war big time. And that is not far off. To Rickards you listen:

http://video.msnbc.msn.com/cnbc/33017647#33017647

This is very interesting. Longs are catching up to shorts in silver. This is the closest I've seen it in years:

See the "Total" section. This may be related to JPMs recent snafu.

Silver COT Report: Futures

Large Speculators