Silver Falcon Mining Inc. (fka SFMI)

[Imperial Whazoo]

Yesterday night, I posited that we would begin to see less and less selling because the people selling now are vulnerable on two fronts due to the wash rule.

My postulate is that, in an example of raw calculated risk taking, dumps were happening in the first part of the month. Due to the wash rule, it can be expected that a seller who deliberately established a loss but who believes the gold is there and who has eyes to see the build out that is underway.... such sellers will gamble that they can sell in the early part of the month and re-buy after getting the loss for tax purposes. The wash rule places a 30 day period of time to the matter.

The only hiccup would occur if there is news that spurs the stock to go back up. Under that scenario, SFMI would surprise them with news (forward sale of part of their concentrate piles to raise money, the joining of the BOD by someone prominent, the approval of one or more of their several applications, the arrival & photographing of the drills.... something along these lines would do it)...

...and they would have to choose between losing out on an up move and keeping the tax event in their side of things.

My postulate is that, given that behavior being affected by the wash rule is logically rational, it thus follows that the selling that has been happening will most likely dry up as the year draws to a close. In fact, I just tossed an Accumulation/Distribution line onto my daily chart and guess what?

Starting at precisely the first days of December, when we all experiewnced this latest wave of dumpage, SFMI has ACTUALLY been under steady accumulation. In fact, the angle of inclination is pronounced. This dumpage has been seen by the chart as ACCUMULATION!

Now then... segue forward to the buying in large chinks we just saw a few minutes ago..

I say that it is far more likely that the old lows of approx 1.4 cents will hold than that they will break down.

Furthermore, I think that there will be ever increasing pressure that serves as support between now and next January because, the longer they wait to sell, the greater the likelihood that folks who want to gain the tax loss by selling will be caught flat footted and be faced with being frozen out of re-entry at the best prices for trading in 2013 if there is any kind of event like the ones I listed in my parenthetical above.

Risk of being caught unable to buy increases every day they hold off on selling. I'm thus watching for what just happened: a wave of large chunk buying.

And given the chart evidence that one man's loss is being taken in as another man's advantage (hence the accumulation), it looks like we are daily more and more likely to have seen the last of the tax loss dumpage.

Just my opinion.

Imperial Whazoo