In the short run, it is difficult to see what can stop equities at this point. Low inflation, central bank support and relatively robust economic data have created a Goldilocks scenario for equities. However, perhaps as a result it is worthwhile looking at what could go wrong. One of the more important intermediate indicators on the equity market is derived from the stock of US margin debt at the NYSE.
We recently got data from March and the increase now looks decidedly parabolic. Sharp moves in margin debt like this have not usually been associated with positive equity market outcomes. This gives us cause for concern on a 3-6 month basis.