Were you surprised how quickly Markets digested the risk of Russia and the Ukraine?
It’s not the news … it’s what markets do after the news hits. In Bear Markets, markets are looking for excuses to pull-back and take risk off the table. In Bull Markets, things can advance, even with uncertainty.
The New York Stock Exchange publishes end-of-month data for margin debt. Historically, surging peaks of margin debt often happen before big market pull-backs.
The chart, below, shows the relationship between margin debt and the market (using the S&P 500 as the proxy for the market). Even adjusted for inflation, the latest data puts margin debt as at an all-time high.
via Doug Short.
Victor Sperandeo advised speculators to ride the false train of hope as far as possible and jump off just before it falls into the abyss.