NQ remained inside a narrow trading range between 5335 and 5355 on Wednesday. All the major stock market indices remains in a parabolic move up, setting up a blow-off top.
A blow-off top usually ends suddenly and reversal will be sharp and relentless as overleveraged traders and investors get forced out of their long position and get liquidated.
On the short term time frame, key price levels for NQ on Thursday will be 5335 support and 5355 resistance. A sustained break could trigger sharp moves in the direction of the break
Margin debt is the loans banks and brokerages make to investors, using their stock- and bond-holdings as collateral. High level of margin debt foreshadows market collapse. It peaked in March 2000, congruent with the market’s March 24 top and subsequent 49% decline. And it peaked again in July 2007, a few months before the market top in October.
