Thursday, October 14, 2010
James Turk - Gold, Silver & What Bulls Dream About
ed note- Is JPM the matador?
With gold and silver strong in Asian and European trading, King World News interviewed James Turk out of Spain to get his thoughts on the price action. Turk commented, “We’re now into the 3rd stage, we are starting to see the panic buying...We are now witnessing the early stages of that short squeeze.”
October 14, 2010
“The metals market was dominated by pervasive fear Eric, when you and I first started to do this series of blog pieces back in the $18 to $19 area on silver. From those levels in the high teens, the market headed higher as many people watched in disbelief. The lengthy 3 year consolidation pattern in silver had simply worn out the bulls.”
“We’re now into the 3rd stage, we are starting to see the panic buying. As I mentioned previously there was going to be a massive short squeeze the likes of which hasn’t been seen since Cornelius Vanderbilt took on Daniel Drew. We are now witnessing the early stages of that short squeeze.”
“I mentioned in our previous interview on October 6th, when we took out 58 on the gold/silver ratio you would see a quick drop to the 50-52 area. What this means is that silver will outperform gold even though gold will be heading higher also. The reason why I expect the ratio to fall so quickly is that I anticipate the short squeeze in silver to be more acute than the short squeeze in gold.”
This type of action is incredibly stressful for the shorts, as only the strongest can hold on to their positions. For the rest of the shorts we saw a bit of disorderly action in early trading as they were margined out of their positions. This is what bulls dream about, a market with enormous short positions that are trapped.