Takes time to shape a mkt top in normal conditions, the more in extraordinary times, where the primary rigger is the same cb. Day by day, you hear more BTFD-mantra, but accumulating here means ignoring what happened back in 07 with a RSI div neg with the same slope. Moreover, the INDU has not b/o the upper TL yet. Sure, the Nyse margin debt could hit higher levels, such as in 07 and 2000, but lets not forget that the same margin debt is at ATH. So at end of the line, I'd consider this chart at least as a warning.
Don't forget to manage and hedge risk....either if you are long or short.
Comments
timwest
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I like your margin debt y/y % change. I believe what my broker is telling me that people are borrowing from their margin accounts to buy houses. So, the debt isn't in the stock market but rather it is in the housing rental and flip market. Either way, once the price starts to fall and trip out stops, then there isn't as much buying power or support under the market and prices can adjust easily downwards. There are certainly many variables to predict a major market move, but a good place to start historically has been margin debt. Good work and nice chart. Tim