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Gold/Mining/Energy : Strictly: Drilling and oil-field services
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To: BigBull who wrote (88742)3/17/2001 10:29:56 AM
From: isopatch  Read Replies (1) of 95453
 
Anecdotal evidence margin use is still heavy,

which implies forced liquidation from margin calls is becoming more and more of a factor as this market decline has been picking up momentum in the past week. Classic example of a major drop in the market feeding on itself as excessive portfolio leverage gets wrung out.

Have seen this in past Bear Markets. And IMHO, looks like we've got quite a bit more of it to go.

Here's a post supportive of that view from SI member Don Sew.

Isopatch

"Just had a conversation with my broker from GRUNTAL, who advised that margin calls are hitting hard right now. I asked him how many of his accounts are/play on margin and he responded about 50%, which I felt was on the high side. He feels that 35%-50% who play equities are on margin, industry wide.

Always hear the buy-and-hold strategy, but thats hard to do if it is true that so many are on margin"
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