Wednesday, December 22, 2010

This Simply Blows Me Away

Two weeks I posted on record margin interest and how that precedes sharp retracements, now there is a chart that illutrates how leveraged investors are (see chart one), couple this with hitting resistance in the Nasdaq at extreme ratio to its 200, and the SPY at nearly record extreme levels to the 200 (April 10 was higher, remember what happened next), sentiment at extreme levels, mutual fund cash at low levels and the put/call ratio at low levels demands prudence on investors part.

This net worth chart tells me the will be tears as not everyone is going to unwind profitably. 

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