ProShares UltraPro Short QQQ ETF (SQQQ)

[littlejohn]

Margin buying pyramid is likely pushing

Nasdaq 100 or NDX at such

a frantic pace...

Swing traders multiplying their

buying power with each big

mover that came in August...

FED cannot buy stocks...

Margin debt has rose a

gigantic sum thru July, 2020...

https://www.yardeni.com/pub/stmkteqmardebt.pdf

You can see in FINRA numbers

that free cash in margin

accounts didn't rise as

fast as customers accounts

in June and July, 2020...


https://www.finra.org/investors/learn-to-invest/advanced-investing/margin-statistics

So those customers may have

used more margin even at

much higher,never before

seen valuations for stocks...


Probability of a 40% to 50%

flash crash in NDX could be

20% to 40%...

To get to more historic

valuation metrics...

Probability of a 20% to 30%

flash crash, since there has

been no correction during

frantic price rise with increased

margin use, could be above 80%...


But hey,it's only paper...

or used to be paper...

now it's just a screen print...



So we watch...LJ