S&P 500 - Melt Up or MELT DOWN....!!!

Financial Bubbles or Panics are usually better understood through RATE OF CHANGE in underlying variables....
O Ashuji....

Rate of change - may be in terms of acceleration or deceleration - is better way of understanding topping or bottoming process. This can be applied to financial markets among many other things.
Few examples...

1) Fed Laughs during FOMC Meet and Housing Market Peak

Confidence in market is directly linked to ignorance and both are inversely related. Most academicians at central banks without an iota of real world understanding are great contrarian tools. Mood is jovial when confidence is high and same is getting reflected in "Fed Laughs" during FOMC meetings. Laughs peaks precisely when housing market was peaking. Magician Ben then believed that housing price decline had contained impact. Housing Market peaked in March 2006 while Central Bankers laughter peaked in Aug-Oct 2006. There is leg impact here as well. 

If one were to watch Bernanke testimony during 2008 crises and now, there is clear difference. Magician was lot more nervous (almost stammered in many cases) during 2008-09 testimonies, while now Magician believes everything can be micro managed. For Economist/Academicians, learning from past is blasphemy. 

2) Marc Faber Media Appearance during Gold Bull Market and Now.....

There is not statistics to this but regular watcher of business channels can make sense of the statement. There was rate of acceleration in MF's media appearance with peaking of Gold price. 

3) Rate of acceleration in Conference organized by brokerage house and market peaks...

4) Rate of acceleration in Company/Industry reports released by sell-side Analyst...

Analyst tends to release highest number of reports during market peaks...They will even try to make sense of CEO/CFO's FARTS during market euphoria. 

5)  Rate of acceleration in India's Finance Minister's Media appearance and lack of its impact of market...

There was time, when Finance Minister statement would move the market because statements were scarce commodity but now comments from Finance Ministry is higher than blabbering by CNBC anchors, resulting in minimal to even negative impact on markets. 

One can find plenty of examples of rate of acceleration in certain variables and its resultant impact. 

The idea of this blog is to understand rate of acceleration in NYSE Margin Debt and its impact on S&P 500.

NYSE Margin Debt and S&P 500 Melt Up or MELT DOWN....

Monthly % change in NYSE Margin Debt

1) Rate of acceleration increases after the trend has been there for some time. (1999, 2007 and NOW)

2) Green boxes marked acceleration towards/near top (1999- Nasdaq, 2006-2007 Housing/S&P...2013 NOW). Green boxes indicate rate of increase in Margin debt of greater than 10%. 

3) Red boxes indicated sharp decrease in Margin Debt typically marking bottom or close to bottom. 

  

All of the above indicates if market doesn't melt up soon enough then melt down is a very high probable scenario. Given massive divergence among global markets, melt down looks more likely.