What is the heavy looking “liquidation” all really about? GDXJ traded 13.9 million shares Wednesday in an awful session. GDXJ is a $2.2 billion vehicle. Twenty percent of the total market cap in one day, seriously? Constant machine gun bursts of 100-200 share trades. Obviously 500-share retail selling can’t cause this, so is this a monstrous institutional dump going on?

Indeed, one aspect I have been watching closely is institutional activity, as well as major insider action. We also know private placements bring out sellers, but there has been a dearth of that lately. There is little serious insider selling going on, and in fact clusters have appeared in several stocks, and I have reported on it.

Gold Standard (GSV) insider buying cluster

From the disclosures, I have spotted only isolated institutional selling in the stocks. There was one good size dump of 30.8 million shares from Sentry in Teranga. Sentry is more an activist shareholder that tries to get on boards, so I am guessing they were unsuccessful on that front and decided to move along. I have heard Brazilian investors may be behind the crash in Luna Gold. Other than those instances, I see little else.

Gold stock mutual funds are tiny nowadays and can’t account for the alleged liquidation. The 17 major funds have about $13 billion in them, really only an afterthought. They have long since been liquidated.

That leaves the usual suspects: hedge fund and algo gaming of indexes like GDX and GDXJ, resulting in market makers evaporating and discouraging natural buyers.

I don’t want to just make excuses as the biggest disappointment in this sector is the lack of scarfs, or takeovers. That serves as a check and balance against slinger abuse and is a serious issue. In fact, one would think large shareholders and institutions are angling for monetizing these hyper-depressed assets. I think Luna Gold is a good example of this, and I bought more of that at 35 cents U.S. When these come (in this small universe of real prospects), they should go off at very high premiums to current hyper-depressed levels.

Fundamentally, I see very little to be disappointed with. Lower energy and material prices lower operating and capex costs for miners and developers. That’s a good thing.

— Pilot found a third porphyry at TV Tower. These results may not be immediate game changers, but they are incremental and do not justify an 8% stock drop.

— True Gold is making excellent progress and showing improved economics, yet it traded at a new low. I bought more at 27 cents U.S.

— Pretium hit row after row of 100+ grams and even 1,000+ gram intervals at depth, and yet the stock got trashed. Nonsensical.

— African Barrick is being transformed into a pretty darn good miner, yet its stock is absolutely on its ass.

-Barisan’s last hole #12 was its second best yet and the stock continues to trade at a $4.5 million enterprise value. I bought more at 14 cents Canadian.

And in my world, good news is exactly that, good news. Right now it seems that great news takes the price down even more. I can’t describe this as “more selling” as Pilot’s $341,000 in trading yesterday doesn’t really qualify as “liquidation” or “selling.” That’s not what this is. It is really more of a vacuum and Pilot is part of the indexes that are being abused.

Wash, rinse, repeat in the Crimex complex

Silver was trashed again, yet open interest rose 2,714 contracts to 172, 906. That’s not liquidation folks, it is accumulation in the face of more paper shorts being offered up.

And how about the U.S. Mint silver eagle sales as a tell? With seven days still left in the month, looks like the best month of the year is in the cards.

Elsewhere in the world of “liquidation,” silver producer First Majestic is withholding 954,000 ounces from the market due to price.

Gold had a rough day but only shed 253 contracts. Again, that is not a “liquidation.” GLD  was extracted for 2.1 more tonnes yesterday. That will feed China for about 1/5 of one session nowadays. Again, not a “liquidation” but rather parasite guild insider fraud. Shanghai deliveries were 29.66 tonnes in the last three sessions, which is hardly “poor demand.” In fact, since the Golden Week holiday, deliveries at SGE are up 50% from average.

Central Fund of Canada closed at 8.1% discount to NAV. That kind of a discount is definitely a tell on sector psychology.

In a sudden about face, China said it’s going to scrap its proposed coal tariffs on Australia. Looks like concessions were granted and bribes paid. There is a free trade deal coming, and I bet China makes asset grabs in Australia. Vista Gold (VGZ) is more than ripe.