Tuesday, October 11, 2016

Ominous Sign Stocks Have Peaked

Margin debt suggests that the stock market has topped out. It is a reliable leading indicator that points at a subsequent decline on a consistent basis.

Mark Hulbert on Marketwatch said this morning that "...margin debt typically peaks in advance of the stock market itself. In 2007, for example, margin debt peaked in July, three months before the bull market topping out in October. As Wolf Richter of the Wolf Street investment blog bluntly put it: Margin debt “has a bone-chilling habit of peaking right around the time stocks crash.”

A word to the wise is sufficient!