I watched the trading very closely this afternoon and it appeared that on thin volume the sellers were going to be able to hold the stock up at 55 cents. The shares on the offer were steadily nibbled away all day yet new batches of a few thousand were piling on, and by 3pm over 50,000 shares were on offer. There was almost nothing for sale thereafter until 60 cents.

My take on the trading is that big rush of buying we got into the close today, and about the same time last week, is the shorts covering some of the blocks they were selling into the market on the ride down. People always ask dumb question like how do the shorts make money on this stock, and why is there usually a small total short position reported? Well you are getting your answer on days like today. The shorts can pile on and take out support early in a trading week, and then sit back and accumulate all of the cheap stock that is puked out by whining retail investors that get discouraged and give up. My guess is that some players are buying 10s of thousands of shares on the bid, and then recycling that stock right back on the offer a few cents higher. This kind of thing goes on for a week, and then they close out their positions at the end of the week with a tidy trading profit to show for it, and of course the paper flipping does not show up in the net outstanding short position.

This sort of thing can go on as long as the sentiment is weak. As long as people live in fear that the metals can be driven down at will, or that ECU is hiding bad news and 'the market is never wrong' (neither assumption is correct) then it will be possible to complete successful raids by selling or shorting a hundred thousand shares or more and then sitting back while cheap paper comes to market. Eventually the weak hands and dummies are sold out, and sentiment level improves, and the scam is ended because there are no more willing sellers to hold back the stock. We are close to that now.

Have a good weekend...

cheers!

mike