Bill Murphy notes that, among other things, Hedge Funds are long bullion and short various PM shares. A profitable strategy it seems, but for the life of me I can't see how, or why. Maybe ECU is one of those being targeted.

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The gold/silver shares still don’t show much exuberance, certainly not relative to the gold and silver price action. And the performance of some of the smaller stocks is downright miserable. Gripes are coming my way from various directions. Re what’s going on, it is the same problem…

*Most of the mainstream gold world and Planet Wall Street is bearish at these price levels. Investors want to sell their shares ahead of the constantly predicted correction.

*Hedge funds are long bullion and short various shares in the sector. If put on properly, it has been a winner. They will stay with the trade until they don’t. Many will reverse the short share positions and go long.

*There is probably some manipulative short selling, a la when JP Morgan Chase borrowed gold shares from Oppenheimer years ago for that purpose.

*The worse some of the shares act, while the DOW advances, the more selling it engenders. The continued lousy action is feeding on itself.

Bottom line: the moribund shares will go ballistic in internet mania fashion. The longer they remain undervalued and unwanted, the grander the explosiveness in the months ahead.