{"id":16928,"date":"2021-01-15T07:30:48","date_gmt":"2021-01-15T12:30:48","guid":{"rendered":""},"modified":"2021-01-15T07:30:48","modified_gmt":"2021-01-15T12:30:48","slug":"not-every-all-time-high-is-a-good-thing","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/not-every-all-time-high-is-a-good-thing\/","title":{"rendered":"Not Every All-Time High Is a Good Thing"},"content":{"rendered":"<p>It&rsquo;s another new record for the stock market! The S&amp;P 500 traded as high as 3824 yesterday &ndash; its highest level ever. And, investors are celebrating the event.<\/p>\n<p>But, not every all-time high is a good thing. The record I&rsquo;m writing about today is somewhat less celebratory.<\/p>\n<p>And, if history is any sort of a guide, then there&rsquo;s another reason to be a bit cautious here.<\/p>\n<p>Let me explain&hellip;<\/p>\n<p>Last month, brokerage account margin debt surged to an all-time high of $722 billion.<\/p>\n<p>Margin debt is money that investors have borrowed to put into the stock market. So, to put it another way&hellip; last month, investors borrowed a record amount of money to put into the stock market at record-high prices.<\/p>\n<p>That&rsquo;s not good news.<\/p>\n<p>You see, there&rsquo;s a strong correlation between record-high margin debt occurring right before a peak in the stock market &ndash; especially following several years of higher stock prices.<\/p>\n<p>For example, in March 2000, margin debt reached a record high of $278 billion. That was the same month the S&amp;P 500 peaked at 1525. One year later, the index was trading at 1100 &ndash; down 28% from its all-time high.<\/p>\n<p>Margin debt peaked again in June 2007 when it reached $381 billion. Sixteen months later, the S&amp;P 500 had fallen by 50%.<\/p>\n<p>The ability to borrow money helps to push stock prices higher as investors buy stocks at ever-rising prices. It&rsquo;s tempting to borrow money to invest in the stock market. After all, if you can borrow money for 2%, invest it, and make 10% or more, then you look like a genius.<\/p>\n<table bgcolor=\"#eeeeee\" border=\"0\" cellpadding=\"10\" cellspacing=\"0\" width=\"100%\" style=\"border: 1px solid #D7D7D7; margin-bottom:20px;\">\n<tbody>\n<tr>\n<td style=\"padding-left: 15px;padding-right: 15px; padding-top: 10px; font-family: Arial,sans-serif;font-size:17px; line-height:24px;\">\n<p align=\"center\" style=\"-ms-text-size-adjust: none; -webkit-text-size-adjust: none; margin-bottom: 20px; font-size: 18px;\"><strong>Free Trading Resources<\/strong><\/p>\n<p>Have you checked out Jeff&#8217;s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just <a href=\"https:\/\/www.jeffclarktrader.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">click here<\/a> to check it out.<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>The problem, of course, is when you borrow money at 2%, and then lose the funds.<\/p>\n<p>Leverage is a double-edged sword. And, the stock market isn&rsquo;t known for making the majority of investors look smart. So, when everybody&rsquo;s borrowing money with the hopes of levering up their returns, it&rsquo;s usually a good reason to be a bit cautious.<\/p>\n<p>Margin debt rose to a record $722 billion last month. That&rsquo;s 10% higher than where it was the month before&hellip; And, that&rsquo;s one of the largest monthly surges in margin debt &ndash; ever. All of that money has helped push stocks to record prices.<\/p>\n<p>But, the stock market making a new high on a record amount of borrowed money may not be the sort of good news many investors think it is.<\/p>\n<p>Best regards and good trading,<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\" width=\"200\" style=\"max-width:200px; width:100%;\" \/><\/p>\n<p>Jeff Clark<\/p>\n<p><strong>P.S<\/strong>. On Tuesday, my team and I filmed an Open Line Q&amp;A for my<em> Jeff Clark Trader<\/em> subscribers where we took reader questions for about an hour. I answered questions about some essential options terms, what to do ahead of an impending stock market decline, and even my current thoughts on trading options on bitcoin.<\/p>\n<p>By joining <em>Jeff Clark Trader<\/em>, you&rsquo;ll have access to these quarterly Q&amp;A sessions with me, along with an archive of training videos, and several special reports such as my <a href=\"https:\/\/secure.jeffclarktrader.com\/?cid=MKT407596&#038;eid=MKT513333&#038;step=start&#038;plcid=PLC089550\" target=\"_blank\" rel=\"noopener noreferrer\"><em>3-Stock Retirement Blueprint<\/em><\/a>, which could allow you to retire comfortably by trading just 3 stocks.<\/p>\n<p><a href=\"https:\/\/secure.jeffclarktrader.com?cid=MKT407596&#038;eid=MKT513333&#038;step=start&#038;plcid=PLC089550\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to learn more<\/a> about this $19 introductory options service that can help you generate wealth using the same techniques I&rsquo;ve been using for three decades.<\/p>\n<h2 align=\"center\"><strong>Reader Mailbag<\/strong><\/h2>\n<p>Where do you predict the market will move this year? Are you excited that the market is moving higher, or are you skeptical that this could be a bad sign?<\/p>\n<p>Let us know your thoughts &ndash; and any questions you may have &ndash; at <a href=\"mailto:feedback@jeffclarktrader.com\">feedback@jeffclarktrader.com<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why I\u2019m not celebrating&#8230;<\/p>\n","protected":false},"author":25,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-16928","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/16928","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/25"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=16928"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/16928\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=16928"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=16928"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=16928"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=16928"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=16928"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=16928"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=16928"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}