Margin Debt Hits Record Then Drops: Classic Late-Cycle Sign | Branimir Vojcic

Latest FINRA data published in mid-August show that US margin debt fell to $1.42T in July 2026 after reaching a record $1.50T in June, marking the first decline following a sustained period of increases.

The chart tracks US margin debt versus the S&P 500 from 1997–2026, highlighting historical peaks in leverage that preceded S&P 500 tops by 0–4 months (median around 3 months). That places September–October toward the later end of the historical window for a S&P 500 decline.

BofA Bull & Bear Indicator Hits 9.7—Extreme Greed Signals Sell

On August 5 (Wed), BofA's Hartnett Bull & Bear Indicator hit 9.7, up from 9.4 and its highest level since 2021—a strong contrarian sell signal for risk assets (banks, industrials, semis/tech). 

 

The indicator aggregates positioning (hedge funds and long-only managers), equity/bond flows, global equity breadth, and tight credit spreads. Historically, readings over 8 have preceded modest average equity declines of 2-3% over 1-3 months (around 60% hit rate), with occasional larger drawdowns, prompting BofA to recommend rotating toward defensives (stable, less cyclical sectors like consumer staples and often utilities/healthcare).

 

See also:

Namzes (August 8, 2026) - All Eyes on OpEx: Volatility Ready to Break Out.

TPR (August 6, 2026) - S&P 500 Hits New ATH as Smart Money Starts Bailing.

 

Goldman Sachs' Panic Index—a 2-year rolling percentile of equity-volatility metrics (VIX, skew, ATM IV, term structure)—collapsed from the 90th to 0th percentile in one week, reaching 1.03 in the 2024–26 chart. The plunge signals near-total exhaustion of downside-protection demand after early-2026 fear spikes, with options flows now call-heavy and rising volumes pointing to upside chasing rather than hedging. Yet extreme complacency has historically preceded both sustained rallies and abrupt volatility. Translation: There is no fear. 

Only the dotcom boom pushed US valuations higher.

 

There is a notable negative divergence between the NAAIM Index and the SPX,

similar to February 2025, which preceded a significant decline in the SPX.

Hedge Funds Dump Tech, While Retail Piles Into QQQ | Jason Goepfert

Hedge funds sold US tech stocks at the second-most aggressive pace in a decade (largest net selling since 2021), according to Goldman Sachs Prime Book data.

Everybody back in the pool: 21-day sum of daily fund flows in QQQ.

 

This institutional selling coincides with strong retail buying, as rolling 21-day QQQ fund flows hit the third-largest inflow in recent years—even as Nasdaq 100 prices rise. A classic smart money versus retail divergence. May 7 (Thu) is the scheduled ITD #5 peak (± 4 CD) in US stocks.

 

Reference:
Jason Goepfert (May 4, 2026) - Funds are selling while retail is buying.

Goldman Sachs Prime Book, as of April 30: Go with the flow.

The GS Prime Book reflects aggregated activity from Goldman's prime brokerage clients (a large but not complete slice of the hedge fund universe), so it's directional but not exhaustive. Similar insights sometimes come from JPMorgan or Morgan Stanley prime services reports. Goepfert specializes in sentiment indicators, including fund flows, options activity, positioning (e.g., hedge funds via prime broker data like Goldman Sachs), and retail vs. institutional behavior (e.g. Dump Money Confidence vs. Smart Money Confidence). Access requires a subscription, but he often shares highlights on X.

 

As of May 1, Dumb Money Confidence was very optimistic,

while Smart Money Confidence was neutral. 

See also:
Alex Krainer (April 27, 2026) - S&P 500 Dumb Money Confidence Enters Extreme Optimism. [May 3 update HERE] 

Richard D. Wyckoff (1931) - The Wyckoff Method of Trading in Stocks: Accumulation and Distribution Schematics.