SP 500 and NDX Futures Daily Charts

Tediously boring day as expected, as the adults are doing other things and have left the desks in the capable hands of their juniors, who are operating under set formulae.

Happy Holiday to all in the US, and for the rest of the world, please try to carry on.

FDR's Thanksgiving Day Proclamation - 11 November 1942

There are times when we fall to our knees and thank God for all His blessings and tender mercies.

And there are other times when we arrogantly refuse to bend or bow, and to defer to anything but ourselves, in a kind of misplaced self-sufficiency and complacent pride. And then God brings us down to our knees first, to remind us, in His providence, of who we are, and how to be grateful for what we have been given.

"It is a good thing to give thanks unto the Lord."

Across the uncertain ways of space and time our hearts echo those words, for the days are with us again when, at the gathering of the harvest, we solemnly express our dependence upon Almighty God.

The final months of this year, now almost spent, find our Republic and the nations joined with it waging a battle on many fronts for the preservation of liberty.

In giving thanks for the greatest harvest in the history of our nation, we who plant and reap can well resolve that in the year to come we will do all in our power to pass that milestone; for by our labors in the fields we can share some part of the sacrifice with our brothers and sons who wear the uniform of the United States.

It is fitting that we recall now the reverent words of George Washington, "Almighty God, we make our earnest prayer that Thou wilt keep the United States in Thy holy protection," and that every American in his own way lift his voice to Heaven.

I recommend that all of us bear in mind this great Psalm:

The Lord is my shepherd; I shall not want. He maketh me to lie down in green pastures; he leadeth me beside the still waters.

He restoreth my soul; he leadeth me I the paths of righteousness for his name’s sake.

Yea, though I walk through the valley of the shadow of death, I will fear no evil; for thou art with me; thy rod and thy staff they comfort me.

Thou preparest a table before me in the presence of mine enemies; thou annointest my head with oil; my cup runneth over. Surely goodness and mercy shall follow me all the days of my life; and I will dwell in the house of the Lord for ever.

Inspired with faith and courage by these words, let us turn again to the work that confronts us in this time of national emergency : in the armed services and the merchant marine; in factories and offices; on farms and in the mines; on highways, railways and airways; in other places of public service to the Nation; and in our homes.

NOW, THEREFORE, I, FRANKLIN D. ROOSEVELT, President of the United States of America, do hereby invite the attention of the people to the joint resolution of Congress approved December 26, 1941, which designates the fourth Thursday in November of each year as thanksgiving Day’ and I request that both Thanksgiving Day, November 26, 1942, and New Year’s Day, January 1, 1943, be observed in prayer, publicly and privately.

IN WITNESS WHEREOF, I have hereunto set my hand and caused the seal of the United States of America to be affixed.

DONE at the City of Washington this eleventh day of November, in the year of our Lord nineteen hundred and forty-two, and of the Independence of the United States of America the one hundred and sixty-seventh.

FRANKLIN D. ROOSEVELT

New Twists In MF Global Scandal Focus On the CFTC - A Bastille of Deceit

Mark Melin has been doing an excellent job of covering the MF Global scandal and cover up. With a few notable exceptions like Forbes, the mainstream media has been silently complicit. Investigative journalism is far less safely profitable than staged debates amongst commercially endorsed opinionators. The news gives way to spectacle.

This is an excellent example of the credibility trap. That blatant theft occurred and no indictments and prosecutions have resulted seems so unbelievable that most tend to ignore it.   You don't understand, it takes time, it takes time. Yes, to cover things up, to kick the can down the road, and hope that the people lose interest.

And yet this is just one instance of the distortions that are plaguing the global commodity and financial assets markets. The long delayed investigation into the silver market is most likely another.

The most urgent problem facing the US and the Western nations is not a 'fiscal cliff.' It is the pernicious corruption in the financial system that has captured the politicians of both parties, and distorted the public conversation through influence in the media and directing the opinions and buying the research of 'experts' through the power of big money.  The people are held hostage in a Bastille of deceit.

What a condemnation it is, that so few love the truth for itself, and willfully turn from it, being led in their choice by the lies that favor their particular flavor of greed, and rotten self-interest.

New Twists In MF Global Mystery Focus on CFTC
By Mark Melin

A delay in a Congressional report set to outline details surrounding MF Global findings was announced at the annual Futures Industry Association (FIA) conference just as insight regarding likely criminal behavior that damaged commodity market integrity moves into plain view.

Over the past weeks Dan Roth, president of the National Futures Association, a primary front line regulator for the futures industry characterized the actions leading to missing MF Global funds as theft. Mr. Roth has pointed to the fact it matters not if the illegal funds were transferred to the benefit of an individual, as in the case of PFG, or if the illegal transfer of customer assets was due to meet operational needs of the company.

Any such transfer is considered legally theft. In fact, could the argument be made that Russ Wassendorf, founder of PFG, had transferred customer funds to support ongoing company operations? If Mr. Corzine is allowed to transfer customer funds to cover firm operational expenses, is Mr. Wasdendorf allowed the same courtesy?

While the primary focus is on the initial criminal acts leading up to the firm's bankruptcy, the potential cover-up that occurred afterwards, like Watergate, could be more troubling.

Highlighted are two points of potential criminality: the initial phase, when illegal money transfers were hidden by false segregation reports; and the cover-up phase, where the CFTC was in possession of potentially criminal information and knowingly withheld this information. CFTC's inaction and withholding of critical information, particularly in court, resulted in significant damage to the integrity of the segregated account.

The Initial Offense:
The first phase of likely criminality has been documented by both regulators and industry participants:

1. On Wednesday, October 26 2011 MF Global was given clear instructions from regulators not to transfer assets.
2. After this order, MF Global transferred assets from customer accounts so it could cover its in house trading losses.
3. The illegal asset transfers were initially hidden by false segregation reports submitted to regulators. These segregation reports were known to be false on Sunday, October 30, 2012, as the customer shortfall was the reason for inaction to sell MF Global to Interactive Brokers.

The Cover-up Offense:
The second phase, the little known aspect of misrepresentations that diminished the rights of MF Global customers and damaged market integrity, occurred after the now infamous Halloween weekend of 2011:

1. On Tuesday, November 1, 2012, MF Global went to court with the express purpose of providing testimony relative to the bankruptcy of MF Global holdings. In testimony, an MF Global legal representative represented that funds were accounted for, but did not mention known contradictory information, some of which is considered criminal in nature.
2. This testimony was delivered to the court while MF Global and the CFTC where acknowledged to possess information that a shortfall in customer assets existed, the asset transfer occurred after MF Global was given orders by a regulator not to transfer assets and reports provided by MF Global contained false information.
3. Perhaps most egregious, a CFTC lawyer, in attendance on directions from Washington, D.C. did not object when the agency possessed information contradictory to MF Global's testimony.
4. Had the CFTC objected or otherwise reported to the court at any time what it is documented to have been known, a fraud investigation would have likely ensued, MF Global customers would have retained their rights and the segregated account would have been defended.

(For details and documentation, see the article below entitled "Who Knew What and When Did They Know It?")

Delay in Congressional Report on MF Global Announced

The keynote speaker at the FIA event was Congressman Randy Neugebauer. Congressman Neugebauer is Chairman of the House Financial Services Subcommittee on Oversight and Investigations, which held critical MF Global hearings over the past year. The goal of the Congressional report, like the Giddens Trustee report, is not to identity potential criminal behavior but rather spotlight areas of concern.

It was set to release the report on the one year anniversary of the MF Global affair, but has been delayed...

"The MF Global affair is not complicated," was one message communicated to Congressman Neugebauer. "Are you aware of what occurred in court on November 1, 2011 and what the CFTC did NOT do?" was another question asked by this reporter, to which Congressman Neugebauer responded "MF Global had weak risk controls." Congressman Neugebauer is Chairman of the House Financial Services Subcommittee on Oversight and Investigations, which held critical MF Global hearings over the past year.

"The significant point is MF Global willfully ignored CME's order not to transfer customer funds," notes attorney and Customer Commodity Collation President James Koutoulas. "If the transfers were proper, why wouldn't they just ask for CME Group's approval?" The CME Group was MF Global Designated Self Regulatory Organization (DRSO) and had front line regulatory authority over MF Global.

Read the entire story with links here.

Comex Options Calendar For the Remainder of 2012

Nov. 27 Comex December gold options expiry
Nov. 27 Comex December silver options expiry
Nov. 27 Comex December copper options expiry
Nov. 28 Comex December miNY gold futures last trading day
Nov. 28 Comex November copper futures last trading day
Nov. 28 Comex December E-mini copper futures last trading day
Nov. 28 Comex December miNY silver futures last trading day
Nov. 30 Comex December gold futures first notice day
Nov. 30 Comex December silver futures first notice day
Nov. 30 Comex December copper futures first notice day
Nov. 30 Nymex December palladium futures first notice day
Dec. 21 Nymex January 2013 platinum options expiry
Dec. 26 Comex January 2013 copper options expiry
Dec. 27 Comex December gold futures last trading day
Dec. 27 Comex December silver futures last trading day
Dec. 27 Comex December copper futures last trading day
Dec. 27 Comex December E-micro gold futures last trading day
Dec. 27 Comex January 2013 E-mini copper futures last trading day
Dec. 28 Nymex December palladium futures last trading day
Dec. 30 Nymex January 2013 platinum futures first notice day
Dec. 31 Comex January 2013 silver futures first notice day
Dec. 31 Comex January 2013 copper futures first notice day

Gold Daily and Silver Weekly Charts

Just another day in the snoratorium as the precious metals and miners took a little hit when the Bernank turned his crank, jawbone-wise, in a very light holiday week trade.

The premiums on the bullion funds are impressively low as pointed out in intraday commentary.

They *could* hit the metals in the thin trade, and we can buy the dip for a later date. Life goes on.

The adults will be leaving for the Thanksgiving holiday sometime after noon tomorrow, unless they do not bother coming in at all.

SP 500 and NDX Futures Daily Charts

Bernanke spoke today.

I came, I saw, I printed.

And he is willing to print some more, but would rather not tip his hand.

Otherwise it was an uneventful, boring market.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Premiums are certainly not exuberant especially on the Sprott funds where they are downright thin by historical measures.

The metals were hit about the time that Bernanke started speaking. The short selling trading desks like to key off certain events in order to try and generate a little downside panic and some quick profits from a wash and rinse.

A strong and honestly efficient market with specialists who manage such irregularities would minimize the effectiveness of such efforts, and failing that, which always happens under any system of self-governance, official regulation would prohibit it. Unfortunately the US has neither, and no prospects of any near term change for the better.

This is how it is when markets are left to the machinations of insiders by the abrogation of justice. I think the paper veneer is covering a harder core of bullion held by stronger and stronger hands. Shortfalls develop and leverage increases, and at some point that tired old strategy fails badly, and then we have fireworks to the upside.

This lack of small investor enthusiasm may be bullish for more gains in bullion, after some short term shenanigans by the price fixers and market manipulators, who act largely unaffected by the regulators.

Warren E. Pollock

For those who have inquired, Warren Pollock is as well as can be expected for someone who is caught up in the devastation that Hurricane Sandy has wreaked on his area of the south shore of New York City and Long Island, not to mention the Jersey shore and wide areas inland.

Being without power, and gasoline, and reliable sources of heat in the raw cold of a late northeastern autumn is no fun. And far too many people are still homeless and living a somewhat nomadic existence, as they have described it to me.

He has taken down his blog, Inflection Points, his videos and his twitter feed, voluntarily.

Apparently the negative comments and skepticism, heckling might also be fair to say, and the apathy of the crowd, which he received in reponse to his last few videos was a bit too much for him to bear under the circumstances of his personal situation. Tragedies bring out both the heroic, and the ugly. Anyone who has lived a full life knows this.

There are minority of people who have chosen to believe in an alternative reality, and cannot bear to hear anything that conflicts with their view of the world. You are free to believe whatever it is they wish to tell you to believe. And if you do not, they react with anger and even hysteria. One has to accept that this is just a facet of the human condition, cherish the good who are many, and ignore the rest.

I have been generally impressed with the way in which the governors of NJ and NY have responded to this, and Obama's support for them as well. As usually happens, the well-connected and well to do receive the quickest and most attention. And there have been some serious blunders. At one point in my corporate career I had a large scope of responsibility that included dealing with disasters, and have some understanding of it.

A sound management will learn from mistakes, and continue to improve their processes. A good manager also knows where to apply correction amongst their organization, and at select times a size 11 shoe. And where they do not, it is the duty of their constituents to remind them in the appropriate ways. Under stress, people can forget to be human.

And as always, there have been many heroic acts of selflessness and courage, amongst those government workers who act as first responders.

It is relatively easy for an area to act privately when only a small portion of the people are affected. But when the problem is wider spread, it takes a more united force of government to respond.

And the scope of the damage in this case is vast. This is the largest storm ever to hit one of the most populated sections of the US, and the damage is widespread and deep, particularly in the areas closest to the shore. There are some hour long documentaries about Sandy generally including the word Megastorm in the title, and they are well worth watching. Thank God the low lying areas were spared the heavy rains that were expected.

Warren may choose to begin publishing again at some point in the future, and I wish he would, because I often enjoy hearing what he has to say. I was also keenly interested in hearing about the less fortunate areas of New York City, which seem to be in the news, and then are so often forgotten. Why waste one's beautiful mind on the suffering of others.

A Short Video Primer on the US Debt and Deficit, Hubris, and the Credibility Trap

As I have said on many occasions, the problem is not so much this overblown 'fiscal cliff' and 'debt crisis.' These are spurs to desired action from the status quo.

This is almost an exact replay of the Crash of 1929 and the Great Depression, excepting of course that the US now has a manager rather than a leader.

The problem is the lack of reform of a system that is still given over to malfeasance, and remains badly out of balance.

Shifting the damage that has resulted from financial corruption on to the backs of the weak and the public in order to continue to pamper the predatory class is not the answer. It will only make things worse and at some point most likely tear open the social fabric.

Source

A credibility trap occurs when the regulatory, political and informational functions of a society have been compromised by corruption and fraud, so that the leadership cannot effectively reform or even honestly address the situation without impairing and implicating, at least incidentally, a broad swath of the power structure, including themselves.

The status quo tolerates the corruption and the fraud because they have profited at least indirectly from it, and would like to continue to do so. Even relatively honest reformers within the power structure become susceptible to various forms of soft blackmail and coercion.

And so a failed policy and its support system become almost self-sustaining, long after it is seen by the people to have failed, and in failing becomes a counterproductive force on a sustainable recovery. Admitting failure is not an option for those who receive their power from that system.

The continuity of the structural hierarchy must therefore be maintained at all costs, even to the point of becoming a painfully obvious hypocrisy.

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery.

Gold Daily and Silver Weekly Charts - Cup and Handle Develops - SEC Rocked By Sex and Corruption Scandal

"The filing of this lawsuit now by Weber officially begins the raging clusterfuck portion of the story, as he and his lawyers are releasing lurid details not only about Kotz and Maloney, but about a host of other SEC and SEC IG officials.

It's very strong stuff: the only things missing from this lawsuit are tales of SEC officials running white-slavery rings and snorting brown-brown off the corpses of strippers with West African rebels...

It's hard to say how all of this will shake out. Certainly, from a P.R. standpoint, it'll be ugly for the SEC. One other storyline to follow: If the Weber retaliation claims are true, they fall within an ongoing and increasingly disturbing pattern of federal whistleblowers who have come forward and experienced reprisals themselves instead of having their claims investigated properly."

Matt Taibbi, SEC Rocked By Sex and Corruption Scandal

Hell hath no fury like a whistleblower fired, ridiculed, and scorned in the national press. As you may recall, earlier this year Mr. Weber was labeled a dangerous crank for allegedly wanting to bring a gun to work. He was subsequently cleared in an investigation but was fired nonetheless.

I do not recall hearing about this unfolding scandal at the SEC on the mainstream medias.   But I tend to get most of my serious financial news and commentary from Rolling Stone magainze and the Comedy Central network these days anyway.

The story about this lawsuit came out quietly last week in the wire services with non-descript headlines like: Ex-SEC Investigator Sues Agency, Seeks Damages of $20 Million. There was a more in-depth story from Thomson Reuters that portrayed Weber's allegations as 'hard to swallow in their entirety' here.

The Taibbi piece is an interesting read.  Matt has an outré phraseology that puts a sharp point on his stories. If there is a Congressional investigation about this I would imagine that C-Span would receive a significant boost in the number of viewers for some of the live testimony. Americans do not care much about financial corruption, or even gross abuses of justice and individual rights including torture, unless it involves sex.

As you may recall there was a minor scandal a couple of years ago when it was revealed that there was a propensity amongst some at the SEC to spend most of the quiet intervals between trips through the revolving door between Washington and Wall Street by surfing the web with a bias towards porn sites. 

Apparently not all regulators were so sedentary in their pursuit of kicks, bangs, and thrills of the belly button and below.  You can read the details from Taibbi here.

The continuing development of a potential 'cup and handle formation' was discussed intraday here.

As I pointed out last week, the markets were being taken much too far to the sell side, and it appeared to be tax-selling as the VIX failed to show any real fear that was driving the market. It was more of a financial calculation.

So what next. This is a holiday market in the States, and is going to be thinly traded. There are the 'fiscal cliff' which is artificial, and the continuing conflict in Gaza, which is a destabilizing influence on the region and a human tragedy for all concerned. And thirdly there is the economic instability in Europe and the adoption of the bank bailouts "Japanese model" which is crippling the real economy.

All three of these present a situational risk to markets should they take an unfortunate turn for the worse. There could be an associated divergence between stocks and bullion as they may not present as liquidity events but as a risk trade.

Let's see how the market makes its way into December.

Have a pleasant evening.

Eric Sprott on the Fundamentals for Gold - Physical and Paper Markets

Here are two recent interviews with Eric Sprott. The first one is mostly about gold, and also references the interview from Nov 12 on Bloomberg TV which is shown as the second video.

I like both interviews quite well. In particular I thought Eric Sprott was very articulate and on target with the things he said about the financial system in the latter part of the second interview. I would take issue with a few things he said in the first interview about the deficit, specifically with regard to Social Security, but that is beside the point, which is his analysis of the gold market from the supply and demand perspective.

His observations on gold are invaluable, but largely wasted on Bloomberg's two reporters. They just did not want to hear it. Bloomberg television has become an extended infomercial for Wall Street in the past few years, and that is a great disappointment.

I would have liked to see them ask Eric about the underperformance of his bullion funds relative to the bullion market, and what he thinks is at work there, and what he might be considering to do to reassure investors that his own vehicles will provide a return commensurate with the price increases in bullion.

There is little doubt that central banks have been leasing gold to the bullion banks, and that gold has been subsequently sold into the market. How much is another question. I also think it is very likely that the leverage and claim on physical gold and silver has increased dramatically, as some say to 100 to 1 on the LBMA which is the largest clearing market for physical bullion in the world.

There is a gap in the market. It is being hidden by non-transparent dealings by the banks and the exchanges. At some point that gap will correct, and it may come together with the force of a thunderclap.




Here is the Bloomberg interview with Eric Sprott.

Nov. 12 (Bloomberg) -- Eric Sprott, chief executive officer of Sprott Asset Management, talks about investment strategy and the performance outlook for gold. Sprott speaks with Erik Schatzker and Scarlet Fu on Bloomberg Television's "Market Makers."

SP 500 and NDX Futures Daily Charts - Bounce off Short Term Oversold

"The filing of this lawsuit now by Weber officially begins the raging clusterfuck portion of the story, as he and his lawyers are releasing lurid details not only about Kotz and Maloney, but about a host of other SEC and SEC IG officials. It's very strong stuff: the only things missing from this lawsuit are tales of SEC officials running white-slavery rings and snorting brown-brown off the corpses of strippers with West African rebels."

Matt Taibbi on the Developing Sex and Corruption Scandal at the SEC

As noted last week the stock market was approaching ridiculously oversold levels at least for the short term and was due for a bounce.

The speculation about a possible interim deal on the fiscal cliff is just that -- speculation.

I firmly believe that what we saw post-election was selling for tax purposes. And it may not yet be over. We will have to see if these rallies are met by fresh selling and profit taking.

I am disposed to think of a range bound trade into year end, 'unless something happens.'

Closer Look at Gold's Potential 'Cup and Handle' Formation

There is an inverse head and shoulder formation within the developing handle of the cup and handle formation.

The inverse H&S pattern measures to 1810 as a minimum objective. That is also the point at which the handle would be at a breakout to validate the entire cup and handle formation.

I would expect gold to break out and run to that point, with resistance heavier around 1790-1810. There may be some time to actually break out, as the shorts will attempt to hold a strong line there and at the next major objective at 2100 or so, which is the first objective of the cup and handle.

In a major liquidity event, all bets are off of course, as everything gets sold, and some extraordinary deals may be had for the longer term investor, what we call 'buying opportunities' on the charts.

For those who are not comfortable with trading, establishing a strong long term position is the best strategy in a bull market. Some do both, hold a long term core position that is never touched, and also use a smaller amount of capital to 'trade around' the intermediate term swings and dips.

The most important thing is to never panic and lose your entire position while the bull market remains intact, because it is very difficult for most people to summon the will to buy back in. I have seen many who sold out, and who have never gotten back in because they kept waiting for some extreme 'bottom' that never arrives.

They often fall into 'trading their egos' with paper trades on chat boards, seeking company in their misery of having been right, and then losing their way. Their bitterness is best to be avoided since it weakens and distracts.

A wise trader rarely seeks to obtain 'the bottom' or 'the top.'   This is a mug's game.  An experienced trader waits to find the true trend, and not exhaust their account in pursuit of trading perfection, 'secret knowledge,' pride and 'followers.' The truth is what it is, and it reveals itself to us in its own time.

We are now in a period of 'hysteria' when the unworthy will be blinded by their own pride, and will thrash about in fear and loathing.  Lies will abound and the love of many people will grow cold. 

When in doubt, look to see if a person's words are crafted in love and caring, or in pride and contempt.  This is not certain, of course, since nothing human is without error, but it is a way to avoid the most common of deceptions.   Self-deception is the most dangerous, and the cure for that is humility.  I have learned that lesson, many times alas.

Always look for that rarest of qualities, genuine love of others, because the great deceivers have none but for themselves. 

There will come a time to sell, but I do not think that we are there yet. Is the economic crisis over? Has the financial system been reformed? Is the debt well founded and under strong management? Is there transparency that appeals to our 'common sense?' Is the global currency regime well-ordered and robust? These are some of the signs that we will look for in seeking to find the next plateau.

Net Asset Value Premiums of Certain Precious Metal Trusts and Funds

Sprott Silver (PSLV) added another ten million dollars worth of silver to its books.

The market is still digesting the recent fund expansion, as the premium is extraordinarily low.

Sunday Evening: Fortuna, Imperatrix Mundi

Fortune, Ruler of the World

From Carmina Burana, By Carl Orff, Germany, 1936



The Wheel of Fortune:
I shall reign, I reign, I have reigned, I am without a realm

English translation of the Latin lyrics

O Fortune,
like the moon
you are changeable,
ever waxing and waning;
a despised life
first oppresses
and then soothes
as fancy takes it;
poverty and power
it melts them like ice.

Fate – monstrous and empty,
you whirling wheel,
you are malevolent,
well-being is vanity
and always fades to nothing,
shadowed and veiled
you plague me too;
now through the game
I bring my naked self
to your villainy.

Fate is against me
in health
and virtue,
driven on
and weighted down,
always enslaved.
So at this hour
without delay
pluck the vibrating strings;
since Fate
strikes down the mighty,
everyone mourn with me!

Bill Moyers and Trevor Potter On Big Money's Election Effect

Gold Daily and Silver Weekly Charts - Trading Places, Gilded Rage

Coiling, coiling, coiling for a move...

Much of this selling in stocks and also in the precious metals appears to be tax related, and highly artificial. I would not call it panic, but let's just say that it is not based on fundamentals, especially with regard to market supply and demand in 'real things.'  The valuation of paper is another thing altogether.

I think the election has unhinged financial television. They seem to be off in some alternative reality where they are gripped by a fear of an imminent pigmageddon. 

Gold and silver look like a good long term place to store some provisions.

See you Sunday evening.

SP 500 and NDX Futures Daily Charts

"At length corruption, like a general flood,
Did deluge all, and avarice creeping on,
Spread, like a low-born mist, and hid the sun.

Statesmen and patriots plied alike the stocks,
Peeress and butler shared alike the box;
And judges jobbed, and bishops bit the town,
And mighty dukes packed cards for half-a-crown:
Britain was sunk in lucre's sordid charms."

Alexander Pope

This still looks like hissy-fit tax selling.

CME Loosens Margin Requirements On Gold and Silver and other Contracts

The CME has reduced margin requirements on quite a few of their traded instruments.

In the case of gold and silver futures contracts, the reductions seem designed to bring the margins paid by specs more in line with those required of 'the professionals.'

Volume on the CME is lagging. Perhaps they are starting to feel the pinch.

Lower prices are no substitute for meaningful reform.

Full clearing memo from the CME 15 Nov 2012

Gold Daily and Silver Weekly Charts

The metals and stocks were hit hard today in advance of a weak Philly Fed number and higher than expected unemployment claims. Both results are directly attributable to Hurricane Sandy, in the manner of a no-brainer. One of the more densely populated regions of the US was brought to a virtual standstill for almost two weeks along with $40+ billion dollars of storm damage.

I suspect the selling is winding down as those who have profits take them this year to avoid higher taxes next year. I think it is overdone now. So far this has been fairly 'cool-headed' selling in stocks and shown by the VIX.

The smackdown in the metals today had all the appearances of a well-calculated bear raid timed with a dump in stocks off a predictably weak economic number. This is also known as 'a trading idea.'

I think the coil in the metals is winding tighter and tighter.

For those who can remember trading back then, this is the type of market when Rubin and Greenspan would provide some 'surprise' to turn the market around into a rally. Don't remind me of what it was like trading the short side of the futures back then. One had to be nimble.

Have a pleasant evening. Remember those in the northeastern US who are still suffering from cold and homelessness. It is a very tough situation. Warren Pollock has been reporting from his home in Long Beach, NY. He compares his own area to 'the Dominican Republic' and the area south of Merrick Road, nearer to the ocean, as 'Haiti.'