Interesting action in the markets....Short covering rally on QE3 spec?

Interesting action in the markets, after being down 1.5% S&P500 futures are up 2%, oil has gone from 4% down to 1.1% down and rising. Australian dollar has gone from 99c back to $1.02. USD AND EURO has strengthened against the swiss franc and more. All these trades have reversed their downward trend within the last hour or so. This would indicate that perhaps that some sentiment has changed........wonder what????? As I speak this market direction is increasing.......very interesting..............have the fed phones been tapped???? and QE3 is to be announced soon. Or is this a short covering rally on speculation that the fed will either announce or hint at further stimulus.....

 

Maybe it has something to do with this? http://forums.silverstackers.com/topic-13002-fed-ready-to-launch-qe3.html

 

If I was a conspiracy theorist - I'd suspect the PPT (plunge protection team).

http://www.washingtonpost.com/wp-srv/business/longterm/blackm/plunge.htm

But - as they say - just because you're paranoid doesn't mean they aren't really after you!

malachii

 

JPM said gold would reach 2500+, which I took as a move to push the market up for their own purposes.

Perhaps QE3 will be announced soon and they knew it, allowing them to buy up cheap as people sell out of "safe-havens".
And if QE3 didn't happen, they'd start the big sell off anyway.

 

"I'd suspect the PPT (plunge protection team)"

no such thing .... we have free markets .. there is no manipulation ... no reason at all to suspect anything of the sort .... not at all .... no hedging and wedging ... no insider trading ...

..... nothing to see folks ... go back to sleep ...

 

old benno's let his cronies in on the news early..........again

 

If they were planning QE3 wouldn't they try to kick the price down a bit now, knowing that QE3 will push price up? Or maybe they just don't GIF anymore and letting go of the reins (hopefully, and highly unlikely )

 

Actually, QE3 will probably push the price down, because this is bizarro world:
QE3 will make the markets feel safe that the fed is backing them up to give it "another chance" and "better luck this time".

Don't forget that the only people that truly believe gold is a safe-haven are the tin foil hat brigade, not Mr John Yes Mann who only got into finance because he couldn't become a lawyer like his pops told him to.

JPM know this, and have made their big $2500 call to dangle the carrot for longer.
When enough have taken the bait and have driven the price as high as possible, JPM will sell high and buy low.
They can either action it themselves, or use QE3 as the perfect excuse.

Then again, I'm pretty cynical

 

Can you please explain how they can do this to me? I don't fully understand. I assume you mean sell on paper and buy physical?

But then what when people claim their physical? Default?

 

I'd think (from a newbies point of view), it'd be quite simple.

Assume for a minute that a lot of sheeple listen to and trust JPM. Let's say JPM say "Oooh look, gold will his $2500/oz". Let's say that Mr & Mrs Sheeple read in the morning paper the following information:

(1) JPM says gold to $2500 by end of year
(2) Gold is $1750 now

Mr & Mrs Sheeple then drive down the road, and go buy some gold.

In the meantime Mr. Crooked JPM and Crooked JPM Jr. are busy buying their own gold. And lots of it - they're a big company, with plenty of cash, right? And they are using their reputation to encourage as many Mr and Mrs Sheeples to buy too, because that causes more demand, and further acts to increase the price.

Come a decent high in the market, Mr Crooked JPM and Crooked JPM Jr. say "OK, this is enough profit - sell the lot".

Bang, down goes the price of silver on the 24th December, from $2495/oz to (say) $1500/oz.

Mr & Mrs Sheeple across state in Hucksville Alabama are left blinking their eyes and wondering how, when JPM said gold was going to hit $2500, and it was $5 off that, it suddenly crashed, and how they ended up losing $250/oz on what they thought was a "sure bet", because "JPM" told 'em so.

As a sideline to this story, JPM are featured in the next days main stream media with quotes and interviews of their price prediction back in August where they have the audacity to claim they were right, because $5/oz off is as close to home as home on any prediction front.

 

QE3, here it comes.

 

Short answer: I'm referring to paper gold selling and buying

I believe the recent upward spike in gold has been created by an influx of investors parking their USD in USD denominated assets while the market is volatile.
e.g. Investor XYZ sold out of some US stocks and bought paper gold immediately.

JPM has noticed the trend, and with the spot price being at all time highs, are taking action.
Considering they would already own paper gold, it makes sense for them to spruik gold by making the $2500 call.

This will prolong the period of selling out of stocks and buying into paper gold.

When the POG reaches critical mass, JPM will sell their paper gold at high prices, but continue spruiking.
The trend will reverse when either: JPM initiates a larger, trend-setting mass sell off -or- QE3 is announced and JPM spreads the notion that the market is now safe to re-enter

As the exodus from gold to shares start, the POG will drop and JPM will sweep up all the paper gold at cheap prices with the USD they gained by selling at high prices.