They bombed the thin markets early on, running the stop loss orders and forcing liquidation not only in the futures but in the related markets like the miners and the ETFs.
The first chart shows this fairly well.
This permits a liquidation of certain assets to occur, profits on related plays and short positions and of course the obtaining of key assets on the cheap for the next ride up.
I hate to be a spoil sport but position limits will not really solve this. It would cramp their style of course, but it takes something like an uptick rule and market vigilance against throwing large orders into thin markets to prevent it.
I am sorry for those who are experiencing pain here. This will help you to assess any leverage you are using, which should be none. Also if you have a trading or short term focus and you have the latitude, eg. you are not a long only fund, you should be hedged or out of this until the downtrend breaks.
I have a loss on my bullion positions of about 4.6% thanks to hedging and holding no miners. I did have a few I picked up on a whim on Friday, but there were cut loose early today.
Wait for it. And never add to a losing position during a short term trend that is running against you. 'Averaging down' is for those who do not wish to remain in the game unless it is part of a hedging strategy.
I saw some definite signs of capitulation by the bulls today, but if Europe remains troubled we may not find a bottom until after the end of the year. Let's see how the overnight buying in Asia is going.
