EXPOSED:
ECU SHORT SELLER GETTING SQUEEZED

NOTE: Readers can discuss this topic on the ECU Silver Forum here

LeMetropoleCafe
Sunday August 27, 2006

Having been in ECU for over 5 years and watching daily action as closely as I do, detecting "unusual" market action in the stock is not difficult for me. There have been many times in the past where short sellers entered the stock at what they thought was an opportune time to do so and were wrong. Last one to come to mind was early this year when a short seller using E-Trade, short sold about 700 000 shares between .62 and .68 cents, only to have ECU come out with major news and the SHORTER was the one that had to cover all the way to $1.30. Thank you Mr. Shorter.

Now, we have an exposed shorter of major proportions using RBC and house #1, which in Canada is Anonymous, ie. People who want to trade stocks but that DO NOT WANT to reveal their identity using Anonymous. Now unlike when E-Trade shorted in early 2006, the use of Anonymous became only legal and available on the Canadian Venture Exchange in early spring of this year. Thus, those that wanted to play games or simply sell/buy a large position could simply use h#1 to conceal their identity’s. I think it is an unjust law, but it is legal and thus allowed.

This latest SHORTER began his operation on August 9th,exactly two days after the stock ran from the low of $2.15( Friday, August 4th) to $2.75 on Tuesday August 8th, where the rally took a rest. Now keep in mind that CANADA had a National Holiday on the 5th, 6th, 7th, just for those wondering. Now during that weekend (please feel free to look for yourself) the public forum for ECU on Stockhouse was bombarded with a couple of posters hammering away negatively at the stock and stating that "we will see $1.70 next week" (Remember, Friday the 4th, we got down to $2.15 on good volume and there was some panic selling), so these guys were piling on the fear.

Tuesday the 8th, the stock ran from $2.29 to a high of $2.75 and closed at $2.64 as ECU came out with the usual solid news around 11:00am that day. The VERY next day, the 9th, as the stock is ready to open and "gap up" as people have had time to fully digest the news from the day before, our SHORTER, via RBC, offers a 100 000 share block for sale at $2.61 only seconds before the open and then proceeds to offer one huge block after huge block from the $2.50 range to $2.65. Why would anyone trying to maximize their gains sell in that quantity and at much lower prices then the market was willing to pay!!!

The SHORTER saw the opportunity to Short the stock on an "up tick", and fully guessed correctly that there will be major volume that morning given the news of the previous day.RBC NET SOLD over 500 000 shares (have an official trading summary below) on the 9th, which I believe to be ALL A SHORTING operation. Notice how the next biggest NET seller that day was ONLY 35 000 shares. The stock would have ran to $3 that day if not for RBC as there was NO ONE else selling, and given the great news, nobody should have been selling, well not in that quantity!!!

He also assumed that this is August, people are away, and ECU would NOT come out with another material press release for another 3-4 weeks and thus he had plenty of time to drive the stock down when volume dries up that was created from the news. He was DEAD WRONG there, as ECU came out with even bigger news on the 17th and yesterday, the 25th.

Here is a summary of the following days to make it easy to follow:
  • August 9th RBC NET Sold 508 150 shares-WOW (day after news)
    August 10th.. RBC again biggest NET seller of 89 000 for the day
    August 14th, RBC again biggest NET seller of 106 000 for the day
  • August 15th, the cover up begins by now switching to the use of Anonymous.H#1 net sold 46 000 that day
  • August 16th, RBC largest Net seller of 89 000 and Anonymous 2nd largest net seller at 60 300 shares
  • August 17th, Anonymous biggest net seller of 47 000 shares
  • Surprise surprise,ECU comes out with more excellent results AFTER the close on the 17th, so what do u think happened on 18th???????
  • 18th, RBC biggest NET seller of 187 000 shares and Anonymous net sold 33 000. Give him credit for putting up a fight (after the news again).
  • August 21st, RBC again largest net seller of 69 000 and Anonymous is 2nd largest net seller that day at 43 000
  • August 22nd, Anonymous is largest net seller of 52 000 and RBC 3rd largest at 33 000
  • August 23rd, Anonymous is suspiciously no where to be seen for the first time all month not registering even one trade for the day
  • August 24th, trading halt
  • August 25th, The SQUEEZE is on as the buying overwhelms all selling and RBC shows his hand at trying to buy 200 000 shares at $3.05 and did NOT get filled until $3.25.
  • As of August 25th morning time, RBC HAS NET SOLD almost 1 MILLION shares for the month of August and Anonymous was the second largest NET seller for the month at 425 000 shares, for a WHOPPING 1.4 million shares in total.

Now, I am by no means saying that everyone of those sales are 100% shorting, but based on the sales pattern of coming hard in the morning to keep the stock down, and at the close, and in day after news comes out, I counted about 850 000 shares that has SHORTING written all over it.

On Friday the 25th, after the open at 2:00pm est., RBC was the biggest NET BUYER of 250 000 shares and it was his covering that took the stock from $3.00 to $3.25 in a matter of minutes. If my numbers are correct he could be short another 600 000 shares. If the market finds out this information and I am even close to being correct, which I believe I am, the Short covering rally should alone make ECU reach new HIGHS.

TWO MAJOR POINTS:

1) Naked shorting is highly possible here as the official Short Report that came out on August 15th, showed an ECU total short position of ONLY 141 000 shares. Heck on the 9th alone I am 99% certain RBC shorted 500 000 shares,and was a net seller everyday thereafter, so what is going on!!!!!

2) On Friday the 25th, with ONLY minutes to go and the stock set to close up nicely, RBC, to douse the final push, shows a large Block for sale of 45 000 at $3.17 and two small sell orders at 3.18 and 3.19 when the stock was trading at $3.11. What was most interesting, is as the stock started climbing higher and hit $3.15, the RBC Block of 45 000 at 3.17 magically was removed. That to me showed me all I needed to know. The hand was shown. He wanted to try to keep the excitement down, but was also afraid that his short block would get taken out so he removed it.

The bottom line is that ECU has come up with three excellent pieces of news this month, and if not for the shorting operations, we would have been over $3.50 by now. But that is fine, because if the mkt wakes up to this, the Shorter can take us to $4 on his own IF PEOPLE RESIST the temptation to sell him shares above $3.00. This guy has shorted possibly up to 1 million shares at an average sell of $2.63.He is in deep trouble. Only A REAL WEAK GOLD MARKET and people not knowing the real short position is going to save him from total wipe out.

Given the size of the short we are dealing with, someone of large capital is behind it, so do NOT be surprised if he tries to show more fight on Monday. But if the market is strong and more people realize the games being played, a SQUEEZE OF MAJOR PROPERATION can be had and all people have to do is NOT sell shares to RBC or House#1, and when you see big blocks for sale being offered from either of these two houses, that is nothing more then a last kick at the can by the SHORTERS to drive the price down.

Monday will be interesting.

Cheers
A Significant ECU Shareholder

p.s. All the data was compiled from the official files of Stockwatck Canada.A company of the highest reputation
House Positions
Exch House Bought $Value Ave Sold $Value Ave Net $Net
V 7 TD Sec 619,447 1,630,331 2.63 177,800 467,752 2.63 441,647 -1,162,579
V 80 National Bank 88,500 232,987 2.63 26,400 69,575 2.64 62,100 -163,412
V 1 Anonymous 200,800 524,919 2.61 162,200 426,608 2.63 38,600 -98,311
V 46 Blackmont 32,500 86,600 2.66 0     32,500 -86,600
V 5 Penson 37,800 99,496 2.63 13,200 35,014 2.65 24,600 -64,482
V 15 UBS 20,000 52,356 2.62 0     20,000 -52,356
V 75 MGI 10,000 26,145 2.61 0     10,000 -26,145
V 86 Pictet 10,000 26,100 2.61 0     10,000 -26,100
V 9 BMO Nesbitt 27,400 72,109 2.63 24,000 62,974 2.62 3,400 -9,135
V 19 Desjardins 9,000 23,680 2.63 6,900 18,272 2.65 2,100 -5,408
V 62 Haywood 4,000 10,295 2.57 4,000 10,574 2.64   279
V 67 Northern 1,600 4,064 2.54 1,600 4,160 2.60   96
V 6 Union 0     300 774 2.58 -300 774
V 85 Scotia 22,775 60,273 2.65 25,000 65,810 2.63 -2,225 5,537
V 141 Bolder 10,100 25,801 2.55 14,000 36,760 2.63 -3,900 10,959
V 27 Dundee 0     4,500 12,105 2.69 -4,500 12,105
V 34 Maison Placements 4,600 11,638 2.53 9,600 25,662 2.67 -5,000 14,024
V 83 Research Cap 0     5,000 12,700 2.54 -5,000 12,700
V 81 HSBC 0     8,000 21,141 2.64 -8,000 21,141
V 88 E-TRADE 60,050 157,612 2.62 69,200 182,377 2.64 -9,150 24,765
V 33 Canaccord 84,848 221,961 2.62 94,100 247,886 2.63 -9,252 25,925
V 95 Wolverton 300 771 2.57 10,470 27,861 2.66 -10,170 27,090
V 79 CIBC 8,000 20,760 2.60 20,000 52,892 2.64 -12,000 32,132
V 57 Interactive 4,300 11,267 2.62 16,600 43,561 2.62 -12,300 32,294
V 68 Leede 0     20,000 52,700 2.64 -20,000 52,700
V 54 Global 10,000 25,800 2.58 45,000 118,450 2.63 -35,000 92,650
V 2 RBC 9,050 23,583 2.61 517,200 1,352,940 2.62 -508,150 1,329,357
 		  
 

- END -