Its a slow day for me so when I am bored I tend to begin to generate dodgy charts and tables in excel. I thought I would have a look at the level of margin on the NYSE. Margin is thought to be a barometer of market health both in terms of the perceived willingness of traders to back themselves and also as a gauge of mania. It can be thought of as a how silly or how afraid are traders style of tool. To be honest I am not certain what it says since it is just another means of measuring data. The chart below compares the monthly level of margin as defined total margin debt in billions versus the S&P 500 index.
There does appear to be some interesting wrinkles in the data but everyone see’s their own patterns.