Monday, April 27, 2015

NYSE margin debt still trending down

NYSE margin debt hit new all-time high in March. Normalized to GDP, the margin debt is still below the February 2015 peak. In all of last year, the margin debt really has not gone anywhere and the margin relative to SP500 has actually declined. This pattern is similar to prior stock peaks where the margin debt relative to SP500 declined at market top. I attribute this to professional investors lowering their exposure while dumb money continues to invest through the peak.

NYSE margin debt relative to SP500 and GDB

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