The BS PM “market”

If any new readers wonder why I always use quotation marks around the word “market” when discussing the PMs, its because of days like today.

As discussed in the previous thread, all was well in the PMs and crude until roughly 1:00 EDT when, suddenly, a sharp spike lower appeared. I called Lind-Waldock. “Any rumors of margin increases?”, I asked. “Nope”, was the reply because, of course, they didn’t know. How could they? But…someone did! Down went the metals through the close and down even further on the Globex. Then, at long last and after giving their friends plenty of time to sell, the CME issues a press release raising margin requirements on silver. What a frickin joke. Martha frickin Stewart can do a year in the hole for selling a couple of hundred shares of some bullshit stock on supposed insider info but this crap on the Comex continues unabated. Absolutely fucking sickening.

If you’d like to read the entire release, you can find it here:

All of this BS is clearly a response to this…summarized here by Trader Dan:

Silver Deliveries information – March now at a Premium to May

There were a total of 80 delivery intentions issued for tomorrow with the largest issuer being JP Morgan. I find it interesting that these intentions to deliver from Morgan are for the House and not for Customers. As has been the recent pattern, Barclays is the largest stopper and they are stopping for customers.

There are still 717 contracts open in the March contract.

Something does appear to have changed however – the March contract is now trading at a slight premium to the May. It is not much but it is at a premium. The spread now favors the March by one cent. This is the first time in some while that it has moved from a slight discount to a slight premium. I am going to keep a close eye on this especially with silver up more than 2% today.

Things are getting very interesting in here as we wind down towards the end of the delivery period for March.


Next, we need to know where to BTFD because we definitely want to BTFD. Here you go:
Here’s the mentality you must have:
The margin increase is the pathetic, manipulative response of the CME as they try to protect themselves from the squeeze they are experiencing. Based on past and recent history, you knew it was coming. Ah, but here’s the rub. The fuckers at the CME aren’t going to raise again tomorrow or Monday. They’re done for a while. That “uncertainty” has now been removed. Less uncertainty means we can buy with more confidence. In the end, this is good news if you don’t panic sell and patiently BTFD.

More later.

Sent with MobileRSS for iPhone

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