I still have my bid in for a few more traders below the market but I decided to just do some buying today since I do not think we have much more of a dip to left before the next up leg. Gold and silver opened sharply lower today on the higher US dollar, but there is heavy buying support that props both metals up before any real damage occurs. This is very different from how the metals were trading in prior years.

Now the PM juniors also have been demonstrating some strength indicating buyers are lining up to accumulate shares on the dips. This too is a major departure from the market behaviour of the last few years.

Market data be damned, it looks to me like specs have decided that the real bull market for the metals is here and there is less patience to ride out downturns, and less fear to sell into such events. I am seeing this on an intraday basis across many of the juniors I track, including ECU. I always expected that improving sentiment and increased volume would break the stranglehold on this stock. This certainly appears to be the case.

Other people have pointed out that there is a huge overhang of outstanding warrants in the money right now for ECU. I suspect that some people are monetizing that value and cashing in during this higher price regime that the stock has enjoyed recently. That is good news for the company as it injects more money into the treasury. There is a lot of time left before the warrants expire, and people wanting to cash in can just sell the wrts on the market with their own listing. So I doubt the warrants are going to crush the uptrend that ECU is on.

Considering all of the above, I added more ECU today to my trading account. My personal expectation is that we have most of the manufactured downturn already wrung out of the sector. The Euro news is NOT news. People have speculated about the debt issues in Ireland, and Spain and Portugal, for many months. The ongoing money printing spree is bearish as hell for all currencies, and the mini-bounce in the dollar is already long in the tooth. The COMEX manipulation-fest around the monthly op-ex is also behind us now, as is the G20. We have just the employment data report on Friday ahead and then there is very little ammunition left for the shorts to rally around.

I fully expect both gold and silver to run to new highs before the end of the year. Some people believe the metals are going to be crushed into the winter as they were last year. The COT report makes this a very dim possibility as the open interest has already contracted and squeezed out the weaker long specs. Also, the physical bullion market is too strong to allow for a protracted period of weakness. The law of diminishing returns applies even to those crackpot pinheads that get so much media attention in predicting a PM bubble and pending collapse. The Cartel has played the margin increase cards already too. Taken as a whole, I think the factors contributing to lower metals prices have all been accounted for and baked into this market. I am watching for a reversal later today to the upside, and perhaps a pause on Friday with the jobs data, then a big move higher for the early part of December.

JMHO and I am frequently wrong, but my money is exactly in line with my own expectations and I have been buying.

cheers!

mike