Shorting leads to market liquidity, as we are lead to believe :)...

Shorting leads to market liquidity, as we are lead to believe :) The good news about short selling is that is often leads to strong, quick reversals when the shorts get bought back to close their positions, which they inevitably have to do!

LGL has been hit pretty hard lately, like most gold stocks. The gold price has been only moving a few % in the past week or two yet LGL has trended down regardless of the price - often gold stocks lead the way of gold prices so it is probably a sign of things to come. Noticed especially in the past couple months that LGL has a strong bias down, reminds me of the period in Jun-Aug last year when it was very heavily sold down on fears of a write-down in their Ballarat mine - which has since been written off. So what rationale is there for the selling down this time?

Will look to add to longs soon, probably at just under the 2.50 level which has been support since late 2008. My only concern is the trend of the US (and mostly our) markets, there has been an err to the side of caution lately and all buying strength is sold into and leads to these reversals on positive days.