Notice also that margin debt (white line) will decline shortly BEFORE stocks begin to crater. Thus once investors begin to use less leverage to buy stocks, the market begins to sell off, which will then case margin calls, and more selling. It all feeds upon itself. So each month, let’s keep an eye on margin debt, because sooner or later, investors are going to take money off the table and what comes of it could be interesting.
Randy Woodward
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