Brad Lamensdorf, manager of the AdvisorShares Ranger Equity Bear ETF HDGE, +2.45% , warns this market could be about to get “nasty” for the bulls.

“How much credit is out there, borrowed against stock portfolios? Trillions of dollars,” Lamensdorf said in a report co-written with John Del Vecchio. “As interest rates creep up and more portfolios have been used to finance asset purchases, a huge storm can be created if stocks and bonds take even a minor dip.”

As the old saying goes, you can always buy a boat, but you can’t always sell one. “Shedding assets when everyone else is feeling pain leads to terrible deals for the seller,” Lamensdorf wrote, adding that we may be reaching a tipping point.

Take a look at this chart:

Credit balances at the NYSE are at historic levels, and investors are clearly “gorging like pigs at the trough,” Lamensdorf said.

Sound familiar?

You can see in the chart that investors had a substantial negative credit balance just as the dot-com bubble was topping out. After the crash, they had a positive balance, and “they missed out on a huge buying opportunity” ahead of the recovery.

We saw it again a few years later. The negative balance of the housing boom turned into the biggest positive balance in decades during the mortgage crisis.

“Now, as the stock market has practically gone parabolic, investors have taken on massive amount of margin debt,” he said. “When this margin debt is unwound, like it was during the last two bear markets, it’s going to be nastier than before because there is so much speculation in the system... The pain is coming and unavoidable.”

Brad Lamensdorf Brad Lamensdorf

Is “the pain” starting? The Dow Jones Industrial Average DJIA, -1.92% closed Tuesday down almost 400 points.

“Right now, small changes in rates might not be noticeable. However, like boiling a frog in a pot, it all adds up,” Lamensdorf concluded. “Investors with sizable portfolios have the most to lose. But, they also have the most to gain if they can navigate the market unemotionally and be greedy when others are fearful.”