The NYSE margin debt levels were just released. The number for September 2015 came in at $453,896 which is below the 10 month moving average signal line of $476,836. This is the biggest break below the signal line since the pullback in mid 2011.

margin-debt-chart

What caused the margin debt to plunge? The price of oil. Oil underwrites a lot of margin debt. Many of the largest sovereign wealth funds on the planet are oil based. Brokerage firms extend margin to their clients based on the value of their oil holdings. When the price of oil drops, a global margin call goes out. Either reduce your margin by selling off some of your assets, or deposit new monies into your account.

Here is the price of oil and the margin debt overlapped on the same chart:
margin-debt-oil-chart

Oil began falling in June of 2014 and it pulled down the margin debt with it. In the first quarter of 2015, many thought oil had bottomed (myself included, ouch!). Oil began rising and so too the margin debt levels. However, in June 2015 oil rolled over and continued its downtrend and you can see that the margin debt once again plunged.