Margin debt has looked high for years, but most studies of it used the total dollar amount outstanding rather than comparing it to a much larger U.S. economy. Now, even relative to nominal GDP (which includes inflation), this measure has made a new all-time high. While this could be the margin-debt equivalent of a breakout poised to keep running, it looks extremely extended. (Chart sourced via The Felder Report.)
Prior peaks in margin debt have been closely correlated with earlier market tops. On its own perhaps not highly concerning (though history indicates otherwise), but in concert with other alarm bells — enormous de facto insider selling via the various trillion-dollar IPOs and increasingly narrow market leadership — it further justifies this newsletter's numerous recommendations to be booking gains and holding more cash than usual.