Louvem's shares were in demand early this morning from a bona-fide buyer, hitting $1.72 for another multi-year high. I have been closely watching volume activity in this company's transactions for nearly seven years now. It's always nice to see new interests buying into our company.

I see one firm has done most of the selling today. In my years of watching Louvem, I do not recall this seller ever buying much. On the first day or so after Louvem reported higher 2008 earning this one entity started selling. Are we witnessing a very old holder of the shares liquidating in here or is this something else?

The something else to be exact is, are we witnessing "naked short selling". Naked short selling is when someone says that they have intentions on delivering sold shares but never do. This means they are executing sell orders for shares that plainly do not exist. Otherwise, they are supplying to the marketplace phantom shares that were never issued by the transfer agent for Louvem Mines. Is the recent big buyer just purchasing "hot air" from the seller or are there real certificates coming? Under the rules, the shares must be tendered within three days after their sale. Like I said, I have never seen this seller purchase anything near to what they have been flooding the market with, especially today.

Many financial writers in the US, for sure, have addressed lax regulation in Canada in this "selling and not delivering shares" issue for many years. All the while, silence comes from the other end.

When the shares hit $1.72 this morning, if there were a naked selling operation in effect, all those sales sold prior have resulted in a loss. History has shown that with large pool operations they involve many different stocks. Louvem could just be one of many.

The dark side of the market usually waits for stocks to hit new highs along with good public participation and then they lower the boom with phantom selling for hopeful profits later as they force the share price lower with more sales, which appears to be the case today when the stock started dropping from $1.72 to its last of $1.55. In the case with our shares, a very serious entity wants ownership in our company in a rather impatient manner.

On the NYSE some financial writers have accused phantom short sellers of depressing the share prices inHecla Mines(HL) and Coeur D'Alene Mines(CDE). Both of these companies have experienced large percentage losses in past months. Another stock that was seen as being manipulated lower with naked short selling were the shares of Overstock.com. In this particular case, their president has been going after everyone involved with a battery of attorneys.

If it's true that a naked shorter is working on our stock, then they are doing this only from a computer printout of stocks making new highs. Whoever programmed their software didn't take into account Louvem's special situation with Richmont Mines holding 70% of all the shares. Usually, when a company holds a great majority of another company's shares it just becomes a matter of time until they want the rest.

If a naked shorter is operating in Louvem's shares, be forewarned that one morning you may wake to the news of an offering by Richmont Mines to purchase all Louvem shares not held by them. The question presents itself, if shares have to be turned in or exchanged and they don't physically exist, what happens to the seller? Does he go to jail for fraud?

On the brighter side, the XAU Index is holding well above its recently bettered 200 day moving average line and appears headed higher. Louvem's shares will receive more buyer attention as the general group of gold and silver related companies advance.