Margin Balances

As markets get more richly valued, it is bound to make a value investor nervous. One of the methods that I like to gauge the richness and euphoria in the market is to look at the use of margin debt to buy equity.

Based on this chart, even though the general market looks richly valued (based on PE ratio), it doesn't look like the euphoria has taken hold

Data Source: http://www.nyxdata.com/