errol43 said:
Captain Turk..Any news on CME maintenance calls which have been reported as taking effect from Monday..
Do we find shelter for the SS, head south, wait for the storm to pass, put up all our sails and head North..
What do you think dear Captain.
Next week may test our sailing skills.
Regards Errol 43
PS I want to win the golden anchor.
Apologies for my silence. I may be a bit quiet for the next few weeks - but always with you in spirit!
The CME 'global' margin change is a response to perceived systemic liquidity risks. If this is true, then silver and gold might be sold down somewhat over the next 48 hours, but at this stage I don't expect a rout.
Given silver's 'natural' (*cough*) volatility we might be hard pressed to notice anything different.
Reducing the CME initial margins might increase volatility in the medium term, but is unlikely to do a lot in the short term by itself.
A margin increase can hurt silver, so a margin decrease might be construed as slightly bullish, but the dynamics of hitting a 'current' player and lowering the entry barrier to new players are fundamentally different.
(There is always the question of what will happen when the initial margin is raised again but it's too early to speculate on how they will manage that.)
The worst thought is that IF this margin change might benefit silver in any way, JPM will be ready with the fire hose to quell any exuberance. In fact, the fire hose might be ready even now to use the margin change as a smokescreen cover for a counterintuitive hammering.
Regardless, there is not a lot of margined padding under the silver price right now, so if they drop the price it will probably bounce up again in short order.
I think the picture will be made clear in the first few hours of trading. If we get a stable price with perhaps a slight rise until just before midday, than a gentle afternoon decline, then I think the 'danger' will be largely over.
Any untoward effects (apart from 'common' manipulation) will probably be seen early in the Monday trading day or on Monday nights NY session.
Keep her pointing north Errol43!
