Margin Debt Liquidation, according to the website WolfStreet.com hit 40 Billion Dollars in the Month of October 2018, the highest monthly sale of debt since the Lehman Crisis,in November 2008.
If you were asking yourself, WHY DID, the market go down so far, so fast,look at the massive amount of forced selling. feeding on each other, as prices continued to drop, thus forcing more selling, and so on.
So if if that selling has already occurred, and out of the way, and the market is in the process of making higher lows, as it tries to recover, and rally back, the question that needs to be answered is.. because the light bulb just turned on..
Has Capitulation Already Occurred...?
I don't know for certain the answer to that question, but certainly margin debt selling is compelling new evidence, that the capitulation that many have been waiting for, ... might have already have occurred.
Very important subject matter, that requires for a revisit soon.
There is more to come and I think this is just the beginning.
David_Scott
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At this point the market is a slave to the global macro economic factors I think. Trump Trade War w China, will there be a deal this weekend or this year? Will the 25% tariffs go into effect Jan 1? What's the FED rate hike plan, is it getting more dovish? Is a Brexit resolution finally coming in the next 10 days? War with Russia and Ukraine? I think the market is trying to find a bottom at least in the short to medium term. But the rug could still be pulled out from under it with bad macro events.
@The_Unwind, I think at this point both Trump and Xi are under a lot of pressure to come out of G20 with some positive news (and hopefully no additional tariffs). If we get positive news I think next week could be quite bullish. As you pointed out we're in a potential bottom with semi conductors rallying tech rallying and S&P starting to look like a double bottom. I think we could see a flurry of shorts covering on Monday and a lot of fomo buying if G20 brings a deal or something close to a deal. Of course...all depends on how it all goes. It will be interesting to see. It's a tough market to play in as much as I like the volatility things can move against you quite quickly (whichever direction that is).
I agree with you 100%.
The move up this week has caused to market to do the unexpected.
That is always difficult to trade. Second guessing ,causes mistake.
I went long SMH on the open today,91.93 on the Open took a $1.00 profit and got out.
That's about all I could do today.