Many reasons to see sustained market gains but margin debt may suggest a correction

Posted By on March 3, 2013

Margin debt has been rising along with the stock market.  My suspicion is that the increased participation by hedge funds and other leveraged players may distort the historical picture. Nonetheless, spikes in margin debt (i.e. “negative credit balance” in the following chart) have been consistent with approaching market corrections or at worst, material market tops.  The analysis below was courtesy of Doug Short of Advisor Perspectives as annotated by Chris Kimble of Kimble Charting Solutions. Jeb B. Terry, Sr. March 3, 2013

Margin Debt March 2013

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