Margin loans are programs that allow investors to borrow money to buy equities. So if you think through it: the higher the margin balance in the market, the higher the S&P will go, because people will have more borrowed money to put in the stock market. Today, the total margin balance is at $350 billion for NYSE member firms.
The evidence is presented on Chart 1. You can see that there is no lag between the two charts, so it's a rather useless correlation to time the market.
|Chart 1: Margin Balance Vs. S&P|
|Chart 2: Margin Balance Vs. ASX200|