Quick Wrap

So silver broke the $29 level today, we'll be looking at AGQ for some swing trades and SIL for a longer term position so long as SLV / Silver holds strong above $29 or advances. I'll post some charts tomorrow, but I'd love to be able to buy on a pullback, so long as $29 or so can hold.

ZH had this article up tonight, check it out and take a look at the charts below. This is what 3C shows and why the readings seems so counterintuitive.

http://www.zerohedge.com/article/glimpse-paulson-dumping-stock-funds-sales-lng-accounts-124-last-ten-day-adv

Make sure you read the article and pay attention to the known timeframes of accumulation and distribution.

 From the article- " Paulson & Co.'s 8 different funds/accounts are doing in Cheniere Energy (LNG) in the past 10 trading days is indicative of a broad based portfolio profit-taking, that has started on November 16 and is ongoing through today"


Note 3C is showing confirmation making higher highs with price-this is not accumulation, just showing a lack of distribution until 11/16 where the negative divergence on the 60 min chart is very clear and is now in a leading negative divergence.

 Also from the article, "he built up an initial 4.7 million share stake in the June 30, 2008 quarter at around $5.50/share, and then buying another 2.8 million shares in the end of 2008 at a far lower price." 


Note again the positive divergences in 2008 that correlate with Paulson's accumulation with the second period starting around October through December, other funds certainly could have and probably did piggyback his trade. The important thing to remember here is that smart money builds positions into sinking prices, at lows where there's not a lot of interest, at least until a volume surge into stage 2 mark p, that is when traders believe accumulation occurs, it isn't, it occurred much earlier.

On the daily chart, note 3C does NOT make new highs with price, the reason, LNG is under distribution.

Take a look at the dates and the charts and it will give you some insight into 3C and how the major players really operate. The article may also be telling us something about the market in general as Paulson was all over CNBC a few months ago talking about how high this market would go and basically it was a new bull market, perfect hype from a respectable source, but questionable. It's a sales gimmick-"Dumb money, the market will leave you behind if you don't buy" while he sells into that demand. Classic lesson in market mechanics and the deception of everything you see from level two quotes to CNBC experts.