Stock Market Danger Signals – Margin Debt

You may not realize this, but lots and lots of investors go into debt to invest in the stock market – especially small investors. Small investors are generally very emotional investors. They get swept up with the ‘thundering herd’. If it looks like everybody is investing in Farm Tractor stocks, they go and invest in Farm Tractor stocks. If everyone is investing in Moon Exploration stocks, they jump in and buy with the ‘thundering herd’. And, they tend to jump in with both feet and lots and lots of margin debt. So, you know when the ‘small investor’ is getting … Click here to read the rest…

Market Crash Likely

According to Marc Faber, the US stock market conditions are almost exactly like what they were in 1987. In that year, markets reached a high on August 25th, and then crashed in October. On Black Monday (October 19, 1987), both the S&P 500 and the DJIA lost more than 20% of their value. When it was all over, the stock market had lost 36% from its August 25 high. “In 1987, we had a very powerful rally, but also earnings were no longer rising substantially, and the market became very overbought,” Faber said on Thursday’s “Futures Now.” “The final rally … Click here to read the rest…