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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
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.'
Stocks headed lower today on weaker than expected economic data in unemployment claims and the Philly Fed number. There was also some distressing news about fresh outbreaks of fighting in Gaza.
Hurricane Sandy will be affecting all the economic numbers for October, and therefore for the fourth quarter. It was an enormously destructive storm, with economic damage in the $40+ Billion range.
The markets are oversold short term. They could become even more oversold, but I suspect we are nearing the end of the tax selling as a result of the Obama win.
Let's see how tomorrow takes us into the weekend. As a reminded, next week will be holiday shortened in the States for Thanksgiving holiday. This is a good time to count our blessings.
