I know that this technical section, however, I posted here number of times. In some cases, I am trying to go "out of the box" to look for confirmation of technical analysis results.I am not fundamentalist, so, I would appreciate any additional inputs...
Starting from June 2015 according to the NYSE report margin debt dropped by $50,000 M. As I understand it means that at least $50,000 M was pulled out of stock market. There is no doubt that traders were closing their position and as a result we had a correction in August-September 2015 - see the margin Debt chart below
Last time we had similar drop in the "Margin Debt" in period from April until September of 2011. As a result of pulling money out of the stock market we had strong correction in June-July of 2011. At that time. at least $60,000 M on margin funds were pulled out of the market and S&P 500 dropped more than 16%. Now, so far $50,000 M of margin money were pulled out and S&P 500 had about 12% correction. I understand that the stocks are more expensive now than in 2011 and $60,000 M in 2011 is stronger than $50,000 now, however 16% in 2011 was about 200 points and 12% now is about 260 points, so I guess it compensate each other.
Unfortunately we still do not have October's "Margin Debt" data neither at
http://www.marketvolume.com/quotes/economic_report.asp?release=margin_debt
nor at the original source at
http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=tables&key=50&category=8
I do not know when the data will be posted, however if the October's "Margin Debt" is down, on my opinion, it could be a serious sign of coming recession. On the other hand, should it go up then it could be some positive sign. I guess, we should wait to see whether the investors continue pulling money out of the market.
Starting from June 2015 according to the NYSE report margin debt dropped by $50,000 M. As I understand it means that at least $50,000 M was pulled out of stock market. There is no doubt that traders were closing their position and as a result we had a correction in August-September 2015 - see the margin Debt chart below
Last time we had similar drop in the "Margin Debt" in period from April until September of 2011. As a result of pulling money out of the stock market we had strong correction in June-July of 2011. At that time. at least $60,000 M on margin funds were pulled out of the market and S&P 500 dropped more than 16%. Now, so far $50,000 M of margin money were pulled out and S&P 500 had about 12% correction. I understand that the stocks are more expensive now than in 2011 and $60,000 M in 2011 is stronger than $50,000 now, however 16% in 2011 was about 200 points and 12% now is about 260 points, so I guess it compensate each other.
Unfortunately we still do not have October's "Margin Debt" data neither at
http://www.marketvolume.com/quotes/economic_report.asp?release=margin_debt
nor at the original source at
http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=tables&key=50&category=8
I do not know when the data will be posted, however if the October's "Margin Debt" is down, on my opinion, it could be a serious sign of coming recession. On the other hand, should it go up then it could be some positive sign. I guess, we should wait to see whether the investors continue pulling money out of the market.
