During the past few months, the big three indexes — the S&P 500 (SNPINDEX: ^GSPC), the Dow Jones Industrial Average, and the tech-heavy Nasdaq Composite — all reached record highs, although they have since pulled back.
That’s left many investors wondering what’s next
Where does the stock market go from here? Although no one can say with any certainty — anyone who claims to know for sure is selling you something — there’s a market warning light flashing that I think is worth paying attention to. It can offer insight on where history says we might go next.
What is margin debt, and why does it matter? Margin debt is money that investors borrow from a stockbroker to buy more shares than they would otherwise could afford. They put up the shares they already own as collateral, in the same way that your home backs your mortgage.