The delinquency rate has now risen about 7 percent to 7.87 percent. Above 7 percent can be considered the level where a real crash can take place at any time.
Realization of this dire state of affairs could cause the stock market to take a major tumble. It would also be the point to get long term bullish on the stock market.
Having said this, I would expect a significant drop if this occurs. I would expect this drop to last more than a few days, more likely several weeks, as the market unwinds and fear takes over.
Source http://www.realpoint.com
Original content Bob DeMarco, All American Investor
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