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Tuesday, April 6, 2010

Is the Gold Market Being "Manipulated" ? (PODCAST)

"Post hoc ergo propter hoc: Latin for "after this, therefore because of this", is a logical fallacy (of the questionable cause variety) which states, "Since that event followed this one, that event must have been caused by this one." It is often shortened to simply post hoc and is also sometimes referred to as false cause, coincidental correlation or correlation not causation" - Wikipedia Definition

Some time ago, I had a "Special Report on Gold" for the "Week in Review" podcast. In that podcast, I talked at length as to what I have seen when it comes to people 'selling the snake oil' as it were. Using emotional sentimantality to sell others to an emotional economic thesis, so that the 'snake oil salesman' could sell assets that they bought at a cheaper price.

Recently, a letter has been spread around the "financial blogosphere" that has purported that manipulation is occurring within the Gold market.

I went through the letter, line by line.

My reaction is as follows ...

(Podcast Included. If you're seeing this entry elsewhere and cannot play the podcast? Click this link to go to the exact podcast entry ...)

Click here to Download this Podcast.

The lack of understanding about the commodity futures markets is unreal. In fact a few weeks back (I kid you not), I heard someone mention the evils of a "naked short" position in the Futures market.

I almost cried myself silly with the lunacy of that statement for the futures market.

Back to these letters, and the logical fallacies therein. Calling a move ahead of time? In no way proves that there must be manipulation. In fact, in regards to that very move in Gold? Here is an issue of "Airelon's Market Tactics" that was released on February 4th at the Davian Letter.

Short Release of "Airelon's Market Tactics"
(Click to Enlarge)

So if I, and many other traders saw this big sell off coming? How can it be manipulation? The element of misleading appearance is not present. We all saw it. Could have been ... gee ... I don't know ... the seasonal pressure that Gold comes under this time of year? Could I have seen that from the CoT report that every individual has available to them every week? Could it have been from watching the volume and the price movement that is available to every individual?

Seeing a move coming before it happens ... is not proof of manipulation. And I didn't even get into the fact that the market did not behave as these individuals predicted recently.

And I'm not saying that some manipulation doesn't occur. Perhaps the size limits were violated, and the market is being 'cornered', and the CFTC needs to lower the hammer. But from that letter? Because of that letter everyone is supposed to be up in arms and whipped into a fury?

Or maybe Dan is in the employ of the conspiracy! Maybe Dan is the secretive vice president of the Goldman Sachs division of "Screwing over the price of Gold" !!

Yeah ... ok ....

Remember. The markets can drive you crazy !!

Anyways, supposedly ... a few days back ... the price of Gold was supposed to "collapse". Hmmm. It didn't happen. Fancy that. So much for that "100 % of the time". Well I have an idea that may help ...

How about folks start listening to PEOPLE WHO KNOW WHAT THEY ARE TALKING ABOUT !!!!!

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Note: This is not an investment or trading recommendation. The losses in trading can be very real, and depending on the investment vehicle, can exceed your initial investment. I am not a licensed trading or investment adviser, or financial planner. But I do have over 13 years of experience in trading and investing in these markets. The Challenge accounts are run for the education of other traders who should make their own decisions based off their own research, and tolerance for risk.


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