Commodities markets today are hearing rumours that the CFTC will begin to impose more stringent margin requirements for non-commercial speculators. Although this will give commercial traders a signifigant advantage (and large firms that are not qualified as commercial will most likely buy energy assets in order to make their traders such), it may serve as a method of wringing out much of the liquidity that commodities have sopped up, and transfering it to equities and fixed income securities, as well as possibly reducing oil prices and price volatility. More importantly in the short term, it would force traders in highly levered commodities to liquidate their holdings. This would most liquid commodities, but especially those that are trading well above their net non-commerical position averages. This includes Copper, Corn and Wheat most prominently. This would be bullish for Natural Gas, which is largely net short (all readings are as of March 11).
This increases my confidence in the bearish case for HG. I would also go long Natural Gas and short an equivalent amount of Crude Oil.
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