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.
Unfortunately, what you're looking at is a lagging indicator. By the time the number came out, the market has already corrected and re-corrected. Well, I need not tell you how much S&P bounced from the September low.
Agree, we still do not know October's numbers. If October's numbers are up then it is indeed lagging indicator for bouncing up. Still, it started to decline two months before correction in September. The same in 2011, it started to decline 3 months before a correction. On the other hand when they publish the data with monthly delay, I guess, It could be too late when we notice a decline in "Margin Debt". We still do not know the October's numbers. What if the numbers are further down?
I believe Charles Biederman's numbers are more current if he's still around. Market Trim Tabs or something. Not exactly the same info probably