Here come the margin calls : es short
Updated
Anyone watching the markets recently has seen how hard it has been crashing. With any crash, there's associated margin calls which spur further selling. In the past four days, my NDO indicator has found volume to be statistically abnormal, which shows that either panic selling or margin calls are beginning to take place.
, but the volume still hasn't reached high abnormality.
This means margin calls may be a serious danger to financial markets because according to en.macromicro.me/charts/415/us-margin-debt, FINRA margin debt is currently at a ridiculous level of around 700 billion usd. If all these funds are forced out of the market, there will be inevitably be further drops as people unload. On the downside, thanks to rally over the previous month, there's an enormous gap to the nearest swing low at 3716, and if that level fails to hold, the market could go as low as the bottom of the trend channel, in a crash to below 3600
, but the volume still hasn't reached high abnormality.
This means margin calls may be a serious danger to financial markets because according to en.macromicro.me/charts/415/us-margin-debt, FINRA margin debt is currently at a ridiculous level of around 700 billion usd. If all these funds are forced out of the market, there will be inevitably be further drops as people unload. On the downside, thanks to rally over the previous month, there's an enormous gap to the nearest swing low at 3716, and if that level fails to hold, the market could go as low as the bottom of the trend channel, in a crash to below 3600
Note
In the short run, this trade idea couldn't have been more wrong. It seems like margin accounts were settled faster than I expected, and on the last candle there was a significant gap up, which is a continuation pattern.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.