CMGI_FAN Posted July 9, 2003 Report Share Posted July 9, 2003 From minyanville.com For the month ended in May, margin debt increased at the greatest pace since February 2000, at nearly 8% over what was seen in April. There have been no other month-to-month increases greater than 4% during the bear market. The next-highest increase, 4%, was seen in May 2001, which of course corresponded to the peak in equities that summer. This increase does tell us that investors are becoming more comfortable owning equities, and on the surface that appears to be bearish. After all, if traders are so optimistic about the stock market that they are borrowing against their holdings, isn?t that a telling sign of complacency? Yes and no. Traders buying stock on margin can provide a significant amount of fuel for further gains, unless and until the market begins to fall back again. On the other hand, when investors have been stung my margin losses and brokers have liquidated a large amount of margined stock, the level of debt decreases and we see the ratio trough at a low level. This happened in 1970, 1975, 1982, 1991 and?now. In fact, we are currently seeing a record decline as far as this ratio is concerned. This is not terribly surprising since we also set a record on the upside only three years ago, but it is still notable. Also, I should note that the ratio has not yet turned up, but it is slowing its decline. If we have another increase in debit balances like we saw in May, then this ratio will finally have formed a low. FWIW.. Jus sumtin to pooder- margarine det must be uzed for shortnin! Link to comment Share on other sites More sharing options...
soup Posted July 9, 2003 Report Share Posted July 9, 2003 you want examples of huge margin buying? How about GM's 10 bil or the state of Illinois's 10 bil? OR this quote from contrary investors "Although history does not have to repeat itself in exact fashion, Richard Russell has noted many a time that during big bear markets (which we believe this to be until proven otherwise), margin debt often ends up at 10% of what were peak values. If that is to be repeated again, margin debt has another 81% to fall from here, or roughly $118.6 billion on a May month end base of $146.4 billion. " Link to comment Share on other sites More sharing options...
Guest Posted July 9, 2003 Report Share Posted July 9, 2003 For NDX if 1307 to 1290 was wave 1 down, we just completed exact 50% retrace to 1298 and are probably entering 3rd wave of smallest degree??? Link to comment Share on other sites More sharing options...
coboy Posted July 9, 2003 Report Share Posted July 9, 2003 Jus sumtin to pooder- margarine det must be uzed for shortnin! When margin debt increased in the 70's, market rised too, though.. 70's was bear market wasn't it ? So, doesn't seem like just a bull market phenomenon.. But it's a very interesting point... Link to comment Share on other sites More sharing options...
soup Posted July 9, 2003 Report Share Posted July 9, 2003 Now get this turd back Under 1000! Link to comment Share on other sites More sharing options...
FeedFool Posted July 9, 2003 Report Share Posted July 9, 2003 Chart Link to comment Share on other sites More sharing options...
machinehead Posted July 9, 2003 Report Share Posted July 9, 2003 soup, you're back! But here in the blasphemers' ghetto, not the true-blue bears thread. Perhaps some can still be saved, though. You gonna co-anchor the MH and soup (OK ... soup and MH, if you insist) show on StoolTV? Link to comment Share on other sites More sharing options...
soup Posted July 9, 2003 Report Share Posted July 9, 2003 where is the true blue bear thread? Link to comment Share on other sites More sharing options...
GregFokker Posted July 9, 2003 Report Share Posted July 9, 2003 where is the true blue bear thread? It's in IDS- go back as if you were changing over to the non-existent (today) PM thread. Link to comment Share on other sites More sharing options...
wndysrf Posted July 9, 2003 Report Share Posted July 9, 2003 Cup and Handle Breakout on SOX. Due to high amount of puts and short interest, this thing could become a real doozy. Link to comment Share on other sites More sharing options...
Guest Posted July 9, 2003 Report Share Posted July 9, 2003 Sold 50% of REDF position at 9.10. Nice 20% in one day. Let the rest ride or die... Link to comment Share on other sites More sharing options...
ongoldenstool Posted July 9, 2003 Report Share Posted July 9, 2003 pop goes the squeezle Link to comment Share on other sites More sharing options...
wndysrf Posted July 9, 2003 Report Share Posted July 9, 2003 Jerry M: CHRB up 68%. Yet another Roman Candle found among the Asian Exotica. This stock barely traded a month ago. What's going on with KRY? I betcha we got hosed on that one. Link to comment Share on other sites More sharing options...
DrStool Posted July 9, 2003 Report Share Posted July 9, 2003 Feedometer and MoGauge Update It's bearish. Link to comment Share on other sites More sharing options...
Guest Posted July 9, 2003 Report Share Posted July 9, 2003 Jerry M: CHRB up 68%. Yet another Roman Candle found among the Asian Exotica. Wow. This is insane... No idea what's up with KRY. These used-to-be-highly-illiquid junkies are now all returning with white-candle revenge, like the Mummy Returns from the Dead...I would have never traded on those, volume too thin and spread to wide... :grin: Agreed that semis are ready to go in a big way...watch AEIS, LTXX, MKSI, stocks with high short interest, shorts could get squeezed "like they were never squeezed before"...(OldBrien's saying) Link to comment Share on other sites More sharing options...
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