These same people...

...have been calling for a massive correction for years now.  This from one of the more bombastic "journalistic pieces" from a popular EOT ("end of timer") website.  There position is of course diametrically opposed to my own (at least that is, until September and October) which has been documented here.

The below remarks simply assume the premise.  Stock markets will correct because the reality is they will correct.  And they are simply wrong to assume "no one sees a severe market retracement".  Most players in the game are VERY cognizant of the possibility, and it may indeed be one of those "welp, can't risk losing to my benchmark" situation for many asset managers.  What is "complacency" anyway?

However, citing Margin debt as some sort of indicator is not the most rigorous way (since it measures margin of both buyers and sellers...and this is complicated by the fact that these days the stock market is wagged the derivatives markets) to bolster your position of a market correction.

Most realize a correction is coming, but the opportunity cost is too high right now with ZIRP, etc. to be out of equities.  My opinion is simple:  Come the Fall, the fall will come.

As stated above, with margin debt at historically high levels when the "herd" begins to turn it will not be a slow and methodical process but rather a stampede with little regard to valuation or fundamental measures.The reality is that the stock market is extremely vulnerable to a sharp correction.   Currently, complacency is near record levels and no one sees a severe market retracement as a possibility.  The common belief is that there is "no bubble" in assets and the Federal Reserve has everything under control.