Possible Warning re: financial downslide?

...they expect most people will not be able to afford the higher requirement in the not so distance future.

Don't give advice, but I would remain cautious holding any paper positions overnight over this whole summer. As everyone knows (or should know), the stock market is a giant scam and all signs point to it getting taken apart soon.

Remember, I am a TRADER, not INVESTOR.

BIG difference, my investment is in RE and gold, my play money is traded.

Take it for what its worth.

Hey OP, Would this start panic in the markets and sell off?
This tells me to get out before the 23.
Huge red flag.


Ideas?

...they expect most people will not be able to afford the higher requirement in the not so distance future.



In the 1929 crash which was the Black Tuesday... Wall Street Crash... people jumping out of buildings... GREAT DEPRESSION...

People bought on margin during those days. This means you can take a loan out for a percentage of the trade. Today (before this change the OP mentions) some brokers will let you buy on 2:1 margin, meaning if you have $10,000 they will let you buy $20,000 worth of stock.

Back in those days (just prior to the Great Depression) people were able to buy with 10:1 margin, meaning if you have $10,000 you could have bought $100,000 worth of stock.

In 1929 stock prices had risen way beyond their true value and were bound to pull back. All those who bought huge amounts of stock on the margin were wiped out in a 5-year period when the stock prices declined by 80% between 1929 to 1934.

THEREFORE, by reducing the margin requirement today it is equivalent to a move back to pre-1929 policy, i.e., you can buy more stock on less margin (which is to say you can greatly increase your RISK FOR CHEAP -- until it all crashes and you lose your ASS.

RECOMMENDATION: DO NOT FALL FOR THE BAIT. KEEP YOUR ASS IN LIQUID ASSETS AND WAIT FOR THE CRASH -- AND THEN THE NEXT CRASH AFTER THAT -- AND THEN BUY BUY BUY... BUT STAY AWAY FROM HIGH MARGIN LEVERAGES OR YOU WILL BE JUMPING OFF THE GOLDEN GATE BRIDGE IN TOTAL RUIN.

I was a freelance trader for 10 years, and what i see on the DOW chart is what is commonly called in the trading community as an "Head and shoulders" pattern, i identified that pattern quite a long time ago, while the last shoulder was starting to be drawn by the market, i give 18 months max before a major collapse of the DOW, it's heading back to the level it was when the first shoulder pattern started, IMHO.

Link to the chart :

[link to ichart.finance.yahoo.com]

...they expect most people will not be able to afford the higher requirement in the not so distance future.



In the 1929 crash which was the Black Tuesday... Wall Street Crash... people jumping out of buildings... GREAT DEPRESSION...

People bought on margin during those days. This means you can take a loan out for a percentage of the trade. Today (before this change the OP mentions) some brokers will let you buy on 2:1 margin, meaning if you have $10,000 they will let you buy $20,000 worth of stock.

Back in those days (just prior to the Great Depression) people were able to buy with 10:1 margin, meaning if you have $10,000 you could have bought $100,000 worth of stock.

In 1929 stock prices had risen way beyond their true value and were bound to pull back. All those who bought huge amounts of stock on the margin were wiped out in a 5-year period when the stock prices declined by 80% between 1929 to 1934.

THEREFORE, by reducing the margin requirement today it is equivalent to a move back to pre-1929 policy, i.e., you can buy more stock on less margin (which is to say you can greatly increase your RISK FOR CHEAP -- until it all crashes and you lose your ASS.

RECOMMENDATION: DO NOT FALL FOR THE BAIT. KEEP YOUR ASS IN LIQUID ASSETS AND WAIT FOR THE CRASH -- AND THEN THE NEXT CRASH AFTER THAT -- AND THEN BUY BUY BUY... BUT STAY AWAY FROM HIGH MARGIN LEVERAGES OR YOU WILL BE JUMPING OFF THE GOLDEN GATE BRIDGE IN TOTAL RUIN.

Hey OP, Would this start panic in the markets and sell off?
This tells me to get out before the 23.
Huge red flag.


Ideas?

yea, i have an idea. those panic sales will be offset by the increased volume letting people who before couldnt participate to get in the game. prices go up.

I was a freelance trader for 10 years, and what i see on the DOW chart is what is commonly called in the trading community as an "Head and shoulders" pattern, i identified that pattern quite a long time ago, while the last shoulder was starting to be drawn by the market, i give 18 months max before a major collapse of the DOW, it's heading back to the level it was when the first shoulder pattern started, IMHO.

Link to the chart :

[link to ichart.finance.yahoo.com]


I agree with you dow will go to low 8000 by summer that why I am looking for companies that will be more afected and buy oct puts on that. Never used margin.

This week, I received notification from two major brokerage houses that I do business with noting the following:

"Margin requirements will be reduced from $25k to $5k effective June 23, 2010"

just buy short.

FAZ, SKF, BZQ...buy those on margin.

Then you'll be rich. Last couple days of trading have been troubling and it signals another drop is on the way.

I'm betting we go under 9500 on this next slide before pausing again.

Freedom Sheep, I love your avatar. Is that an oxymoron (oxymoran!) like jumbo shrimp?

Devalue the dollar by 80%? Foe every 5 you now have 1. $25K to $5K leverage.

Devalue the dollar by 80%? Foe every 5 you now have 1. $25K to $5K leverage.

I have been a successful trader for over 20 years.

This week, I received notification from two major brokerage houses that I do business with noting the following:

"Margin requirements will be reduced from $25k to $5k effective June 23, 2010"

As a trader, reducing margin requirements sends MAJOR ALARMING BELLS.