Equity markets have given up some of their recent gains. Below, we highlight the critical variables to gauge whether a correction will devolve into a sustained sell-off.
Investor confidence can be measured through margin debt. While extremely elevated, there is no concrete sign that access to funds is being undermined by the modest backup in interest rates. When the cost of borrowing becomes too onerous, it will manifest in reduced margin debt and forced selling.
This post was published at FinancialSense on 03/29/2017.
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