Looks like we might have a hanging man candle forming today. I'm thinking the parallels between 2007 and 1929 are quite remarkable. Both with the macro factors such as heading towards recession or worse while the market climbs nearly parabolically, personal debt levels are negative, etc. Technically we have huge margin debt in the market, a broadening top and an almost unprecedented 24 out of 27 days higher on the Dow. The closest parallel to this past month was in mid 1929 about two months before the worst crash ever. The only thing keeping my powder dry is the fact that we usually get more divergence in terms of new highs and lows which is usually a prerequisite for a top. That said I am buying puts at various expirations. I can't see any scenario where this ends well for the market. Three more months max before the selloff begins in earnest. What do you all think?
Well besides the fact that "we have huge margin debit in the market" is a fundamental indicator and not a technical one, I should point out here that if you think the recent headlines news about margin "reaching new highs" was bearish then you either mis-understood or didn't research it very well.
Read this and then tell me if you are still so convinced that recent margin debt "news" is a good reason to short this market.
The market began taking off in August of last year. If major positions were established in the market at that time, then, it would give them the year earmark for tax purposes. Of course, they may just want to get the hell out of dodge. Although I think it was VERY telling that they didn't want it to fall below 12K in the end of Feb/March. JMO.
i agree the crash is coming. but really the dow is acting not normal. if by this week the dow didnt fall for minmum 300 t0 400 point then i think it will hit new highs every day while personally idont belive but every thing can happend in this wierd market.