Traders are borrowing historic amounts of money.
Before this past year, the highest level of margin debt Wall Street had ever seen was $668,940,000,000 in May 2018, according to the Financial Industry Regulatory Authority (FINRA).
By the height of the coronavirus pandemic, however, margin debt had plunged back down to $479,291,000,000 in March 2020.
As of February 2021, traders have borrowed a total of $813,680,000,000 to buy stocks. [FINRA releases its margin debt data a month after the fact… so this is February debt]
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Here the red line shows the amount of margin debt traders are using. The blue line is the S&P.
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Some analysts suggest that if the market is making lower highs [it is not] as margin levels are topping out, that’s potentially a sign of trouble.
But if rising margin levels are coinciding with higher highs in the market [like now], that can be a sign of bullishness.