As long as the COMEX remains the dominant price marker for precious metals, paper ‘fuel’ within the leverage markets will mark the end of the liquidation process (operation). The repairing process will start when the ‘fuel’ has been statistically exhausted. That is, the composition within open interest of future and options reflects a bullish concentration by the strong hands.
Gold London P.M Fixed And Precious Metals Diffusion Index (DI)
Occam's Razor & The Gold Price, by Jim Sinclair
"One should not increase, beyond what is necessary, the number of entities required to explain anything"
Occam's razor is a logical principle attributed to the mediaeval philosopher William of Occam (or Ockham). The principle states that one should not make more assumptions than the minimum needed. This principle is often called the principle of parsimony. It underlies all scientific modelling and theory building. It admonishes us to choose from a set of otherwise equivalent models of a given phenomenon the simplest one. In any given model, Occam's razor helps us to "shave off" those concepts, variables or constructs that are not really needed to explain the phenomenon. By doing that, developing the model will become much easier, and there is less chance of introducing inconsistencies, ambiguities and redundancies.
Using William of Ockham's method for analysis of the gold price reaction, the following has occurred.
1. $1400 was an embarrassment to the thesis of "Inflation under control."
2. Gold Bank hard price blocking drew a top formation but one that will NOT put a long term top on gold.
3. A crazy Hedge fund kid got caught in an underfunded spread.
4. The crazy kid got it backwards either on the spread it self or by using is as a trading position.
5. The liquidation of the spread put more longs into the market than shorts covered.
6. The formation created by the $1400 block, broke down as product of the Spread Traders failures.
7. Algos tripped off the selling and now are trading gold from the bear side. Algos have no intellect, only mathematic soul-less driven machines.
Therefore Occam's Razor applied to #1 through #7 summates that the entire gold situation can be addressed as "Technical Damage Requires Technical Repair and then it is off to the races again"
Jim
Source: jsmineset.com
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