Rising Margin Debt Should Limit The Upside For The Stock Market
- Date: 08-Oct-2020
- Source: Forbes
- Sector:Financial Markets
- Country:GCC
Rising Margin Debt Should Limit The Upside For The Stock Market
(Photo by Spencer Platt)
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Margin debt for the S&P 500 rose by 5.2% in August as the average tries to set a new all-time intraday high. This is a warning as a stock market peak usually occurs following a spike in margin debt.
Here's the chart as prepared by FINRA:
Margin Debt and the S&P 500
FINRA Margin Debt
The chart dynamics for the five major averages tell different stories. The weekly chart for the Dow Jones Industrial Average (.DJI) shows a potential downtrend with a declining 12-week slow stochastic reading. The weekly chart for the S&P 500 (.SPX) shows that this index is retesting its semiannual and annual pivots at 3,442.1 and 3,466.5.
Weekly