Dealers report few speculative flows again today with most trading decisions taken under duress. The sharpest moves are being attributed to prime brokers “selling out” clients; pulling the plug on all manner of positions as margin collateral falls to the point where clearing firms essentially close the doors on hedge funds without warning.

When those flows hit the market, the firm doing the liquidation tends to use minimal “finesse” in the liquidation process, hitting bids indiscriminately, sending markets downhill like a snowball. We’ve seen it repeatedly in all the asset classes.

Keep positions small in this environment as fundamentals and technicals matter less in a market with few speculative flows.