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It doesn’t matter until it matters! IF margin debt should start decreasing swiftly, history would suggest
something different is taking place in the mind of aggressive investors. Will a decline in margin debt from all-time highs matter this time?
The following article is presented by Lorimer Wilson, editor of www.munKNEE.com (Your Key to Making Money!) and the FREE Market Intelligence Report newsletter (sample here; register here) and has been edited, abridged and/or reformatted (some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. This paragraph must be included in any article re-posting to avoid copyright infringement.
Kimble goes on to say in further edited excerpts:
In the past margin debt at historical levels didn’t seem to matter, until margin debt started decreasing. The chart below (courtesy of Doug Short – original article**) highlights that at each (1), margin debt was at historical highs and then turned south and the S&P 500 soon followed.
CLICK ON CHART TO ENLARGE
Conclusion
…Margin debt has been swiftly pushing higher for the past 8 months in a row and now slipped a little this past month. IF….IF margin debt should start decreasing swiftly, history would suggest something different is taking place in the mind of aggressive investors.
Editor’s Note: The author’s views and conclusions in the above article are unaltered and no personal comments have been included to maintain the integrity of the original post. Furthermore, the views, conclusions and any recommendations offered in this article are not to be construed as an endorsement of such by the editor.
*http://blog.kimblechartingsolutions.com/2014/05/margin-debt-takes-a-turn-from-all-time-high-levels-be-concerned **http://advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php ((© Copyright 2014, Advisor Perspectives, Inc. All rights reserved.)
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