Is tomorrow a black Friday?

[ByLoSellHi]

Not to be too cynical, but has anyone noticed the yen depreciate overnight?

That's great for the US equity markets, since so much cheap yen has fueled the buying and maintained the longs.

 

[abxs]

Quote from markcuban:

i say sell it hard... even if it risises a few hundred more points keep selling it...

had a high volume move which broke the back of the uptrand. a retracement on lower volume. sell the bitch!!

agreed!!

 

[scriabinop23]

Quote from ByLoSellHi:

Not to be too cynical, but has anyone noticed the yen depreciate overnight?

That's great for the US equity markets, since so much cheap yen has fueled the buying and maintained the longs.

why don't you ever hear about the unwinding of the short equity trade??

short your favorite stock and use the proceeds to pay for a mortgage from NEW.

 

[Degenerate]

Quote from dhpar:

1. margin is calculated on both long AND short positions....
2. every long contract has a short contract against it

i.e. margin does not tell you much where the market is going - only that vol can potentially shoot up.....

I am talking margin debt as reported by the NYSE. I am referencing equities not derivative contracts, so every long does not have a corresponding short. Total short interest only represents 2.6% of total outstanding NYSE shares as of February,which was down from January.

I am sure you are aware that the last time margin debt was anywhere near these levels was March of 2000. I think this data gives a clear tell where this market is headed as leveraged types are weak longs no?

 

[dhpar]

Quote from Degenerate:

I am talking margin debt as reported by the NYSE. I am referencing equities not derivative contracts, so every long does not have a corresponding short. Total short interest only represents 2.6% of total outstanding NYSE shares as of February,which was down from January.

I am sure you are aware that the last time margin debt was anywhere near these levels was March of 2000. I think this data gives a clear tell where this market is headed as leveraged types are weak longs no?

i think this conclusion makes little sense. There is everything different between 2000 and 2007 except of one single number on margin debt. For instance: PE ratios, use of leverage and access to it (internet changed a lot), liquidity, corporate leverage (!), the state of the economy, everything...

 

[Landis82]

Quote from Degenerate:

I am talking margin debt as reported by the NYSE. I am referencing equities not derivative contracts, so every long does not have a corresponding short. Total short interest only represents 2.6% of total outstanding NYSE shares as of February,which was down from January.

I am sure you are aware that the last time margin debt was anywhere near these levels was March of 2000. I think this data gives a clear tell where this market is headed as leveraged types are weak longs no?

There will be NEW "Expanded Portfolio Margining" effective in April.

The margin rules will apply "Portfolio Risk" standards in regards to options strategies applied to stocks, as opposed to the absurd margin applications that we have seen in the past, and currently use.

http://www.cboe.com/Institutional/Margin.aspx

This will be most helpful in allowing people to hedge their stock positions; especially the retail investor/trader. The old margin rules took up WAAAAAAY too much capital and had little to do with the ACTUAL risk of the position being taken.

 

[scriabinop23]

anyone see that short covering?

looks like even bears are afraid here.

 

[wee man]

Quote from scriabinop23:

anyone see that short covering?

looks like even bears are afraid here.

"I know nothing, I see nothing, and I say nothing!"

 

[ammo]

was this the same scared end of the world pessimism in june july ,i wasn't on this site but i lost a lot in july and august being a market expert,perma bear....gann guys are saying explosion to the upside next week

 

[Degenerate]

Quote from dhpar:

i think this conclusion makes little sense. There is everything different between 2000 and 2007 except of one single number on margin debt. For instance: PE ratios, use of leverage and access to it (internet changed a lot), liquidity, corporate leverage (!), the state of the economy, everything...

You are right everything it different from 2000. The world is a riskier place and risk premiums of dwindled to nothing.

The state of the economy?....All I know is that in 1980 it took $1 of debt to create $1 of GDP. That same $1 of expansion comes at a cost of $7 today. You think 3% GDP expansion is sustainable given the cost? I personally do not.

There is a big difference in true economic expansion and one that is debt induced. We are clearly in the latter and one day we will have to pay for it. I could go on in regards to how assets prices are simply a reflection of a liquidity driven bubble but whats the point. You clearly have your opinion and I have mine.

If you are comfortable levering up here on the long side power to you. I think the prudent thing to do is to exercise caution. I am acting accordingly.

Good Luck to you.