Tuesday, November 9, 2010

Market Reversal Day?

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Reversal Day, well at least that's what most are calling today's action. But as Itz highlighted in this past weekend's post >>LINK  to expect a minor & welcome pullback. After all, several sectors were becoming parabolic and that's not good longer term. We need the pause that refreshes and welcome it.
So what led up to this, or what was the catalyst? Well.... the markets got a change in Congress, QE2 & great Nonfarms Payroll report last week. However, the party is over as some Republicans, Sarah Palin & the German Finance Minister, are suggesting that Fed Chairman Ben Bernanke should go with QE lite instead of QE2. That along with several other factors such as a stronger US Dollar & the CME/Silver news spurred profit taking.
The  market was ripe for profit-taking, sellers had a number of triggers late in the session to unload shares. The biggest negatives were a sudden decline in the euro and a late-day slump in the Treasury market.
Silver Wheaton report blowout earnings after the close last night the stock hit a high of $37.20 this morning, the CEO was also on CNBC's Fast Money Half-Time Report. Shares of the iShares Silver Trust  the exchange-traded fund that tracks the price of silver, fell 3.7% on massive volume as more than 150 million shares changed hands, nearly 10 times the average daily volume over the last 50 days.  News from the CME Group said it was increasing the margin requirements for silver futures contracts to $6,500 from $5,000. The price of silver fell from a 30-year high earlier in the day.
 The nearly 30% increase in margin requirements for silver futures triggered selling after several bullish days in the sector.  There was a lot of speculative money in silver,this led to leveraged longs being forced to sell to reduce margin exposure. This supply fed on itself, which in turn, led to sharp selling across the board in the precious metals futures complex. Silver traded as high as $29.30, but at the close of the days trading was  @ $26.60, currently futures trading has it at $27.36 (7.25pm).

The markets will as projected by Itz back and fill over the next several days. Buy the dips. Below are several key video reports from today.

Are we in a commodity bubble? Mark Fisher, of MBF Asset Management, shares his view.

Silver surged to a 30-year high, sending Silver Wheaton (SLW) soaring along with it. Peter Barnes, CEO of Silver Wheaton, discusses his company's outlook with the "Fast Money"

The Fast Money traders take a look at today's top business stories

Mad Money 'Off The Charts'

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