The bullish extreme has only become even more intense in recent weeks

It has been proven throughout financial history that when the NYSE margin alert levels reach all-time highs, a bull market is reaching the end of its run. 

The stock market peaks of 1987, 2000, and 2007 are notable examples of this phenomenon. 

Traders’ margin debt—the amount of money they have borrowed to acquire new shares while using their existing stock holdings as collateral—has reached a level that is on the verge of becoming an all-time high. 

It is now worth $936 billion, representing a 40% increase over the same period last year. 

At the same time, investors are accumulating record amounts of positions in leveraged long exchange traded funds (ETFs).

The amount of money invested in leveraged long ETFs is depicted in the following chart. 

Some of these investors are placing bets on the stock market going up by a factor of 2:1 or even 3:1. 

The most recent amount, as of December 8, stands at $43 billion, setting a new all-time high. 

Of course, this “new — and drastic technique to improve returns” during a bull market comes with a negative side effect – increased losses during a bear market – that many investors don’t seem to be concerned about at all.