Another Market Signal: Margin Debt

As Alan Abelson points out in Barron's,

in October, total margin debt topped $300 billion, for only the 23rd month ever. The first time that occurred was in December 2006; over the next three months, the S&P was 3.5% higher—but a year later, it was off a painful 22%. And each and every time margin borrowing exceeded $300 billion, a year later stocks had suffered a similar drop.

For that matter, Alan points out, in the one month, March 2000, that margin debt was just shy of $300 billion (for sticklers, it was $299.93 billion), sure enough a year later, the S&P was off 22.6%. 

Nine out of ten indicators agree; it's time to get out of stocks!