The chart below pretty much says it all. The Evil Empire has tried to capitalize on fear this morning. Fear of the PIIGS and fear of margin requirement increases. Don't let them win.
Days like this are just a reminder of why you never trade PMs on margin and you never own front-month contracts, in either the futures or options. I admit that I broke this rule earlier this week and I am the proud owner of some Dec10 $29 silver calls that are considerably less expensive now than they were on Tuesday when I bought them. Bad Turd.
Again, have any of the fundos changed? Sell PMs because of the PIIGs? Hmmm, let's dissect that:
1) PIIG collapse only means more printing of Euros and European economic weakness.
2) PIIG collapse and European economic weakness means more US economic weakness and more printing of dollars.
3) In the end, PIIG collapse only further ensures QE to infinity in both dollars and euros.
And how is QE to infinity a long-term negative for the PMs?
Again, if you're going to follow/trade PMs and miners, you'd better get used to days like today. They have always happened and they will continue to happen. In fact, days like today are only going to get more frequent and more volatile as the Comex gets closer to collapse...of that you can be assured.
Hang in there. I'll update again later once everything has settled out in NY, sometime after 1:30 EST.