Posts filed under “Markets”

Margin Debt Hits 5-Year High

A belated entry: 

"Even last year’s lackluster stock-market gains encouraged investors to borrow money to trade stocks, sending so-called margin debt to its highest level in years.

As tracked by the New York Stock Exchange, margin debt at exchange-member companies rose 7.5% from the end of 2004 through November, the most recent month for which figures are available.

The Big Board’s data show that debit balances in margin accounts of customers of NYSE-member securities firms reached $219.02 billion in November, up from $203.79 billion in December 2004. December 2005 numbers will be available later this month.

As of November, margin debt as tracked by the NYSE stood at its highest level since November 2000, when margin debt was at $219.11 billion. Despite the rise, margin debt still is below the peak of $278.53 billion, which was set in March 2000, when the Nasdaq Composite Index reached its record.

Market analysts track margin-debt activity as an indication of investors’ appetite for speculative trading. A potential pitfall for those trading "on margin" is a sharp decline in stock prices, which can expose investors to "margin calls," requiring them to post additional collateral or brokers may sell their securities.

Note:  I posted this on 1/18/05 becuase I forgot to publish it back on 1/3

Margin Debt Hits 5-Year High
DOW JONES NEWSWIRES, January 3, 2006; Page R6

Category: Investing, Markets, Psychology

P/E Expansion and Contraction

Category: Investing, Markets, Psychology

Death of Volatility

Category: Markets, Psychology, Technical Analysis, Trading

P/E vs S&P 500 (50 Years)

As promised, today brings us to the 4th in our series of charts: P/E vs S&P500 click for larger chart courtesy of Mike Panzner, Rabo Securities > I’ll get into the significance of what this means to the markets later, but for now, note where the P/E is over the median, and its impact on…Read More

Category: Earnings, Markets, Psychology, Technical Analysis

1966-1982 Trading Range

Here’s the 1966-1982 trading range: > click for larger chart chart courtesy of Rydex Funds > If we are in fact in a long, post-Bull trading range — see our 100-year Dow chart — than this is year ~5 of what could be a 10-15 year secular Bear market. As the 1966-82 trading range above…Read More

Category: Markets

100 Year Dow Jones Industrials Chart

Have a look at this 100 year (actually, 105-Year) chart. I colored each “Market” appropriately — Green for Bull, and Red for Bear — to more clearly show what happens. Bull markets get ahead of themselves. At their ends, they tend towards excesses that take a very long while to recover from. When a long…Read More

Category: Markets, Psychology, Technical Analysis

4 Year Presidential Cycle

This is the first of 4 charts I plan on revealing this week. Each one will hopefully shed some insight into what we may expect in 2006. This chart shows what is known as the 4 year or Presidential Cycle. The theory behind this is that U.S. markets have a tendency to make a high…Read More

Category: Markets, Technical Analysis

Trading Before/After Holidays

Category: Markets

What are the odds of 2006 being a positive year?

Category: Investing, Markets

Be Careful with the Contrary Indicators

Category: Investing, Markets, Psychology