Replies to post #2458 on General Stock Ideas

[bigworld]

MF4: We shall see. There has been a lot of leveraged buying of the precious metals and highest beta Nasdaq stocks like APPL. Just a 10% downward move and a cascade of daisy chain selling is likely to occur. As SLV and GLD have run up they have attracted lots of interest, each new buyer requiring the creation of new shares which afterward required the purchase of the underlying silver or gold to back it up...which casued the spot price of gold and silver to get very overestended, leading to more purchases of GLD and SLV, etc. These ETF's become a perpetual feedback loop...until they expend themselves. Then the whole process repeats, only in reverse. Selling GLD and SLV means that they destroy shares and then sell the underlying metal which depresses the spot price of silver and gold which induces more selling of GLD and SLV....A significant correction in both gold and silver is highly likely to occur because the consens opinion is that neither can ever retreat due to fears of Bernanke's printing press. Beware the crowded trade. Always.