📈 Institutions vs. Retail

This marks bottoms.

Smart Money vs. Dumb Money

For those of you who watch my YouTube videos, you know that I often look at the Smart Money / Dumb Money confidence spread (or as I call it, the Institutions / Retail confidence spread) to get signals on where the market is headed.

I haven’t reviewed it in a while so let’s see where we’re at and what it means.

You can see that right now the spread is near lows. You can see that when we mark lows on the spread, we usually mark bottoms on the market.

This is an encouraging data point and suggests that we may be bottoming if we do not take out lower lows on the confidence spread.

Looking at the underlying data behind the spread, you can see that retail is heavily invested while institutions are somewhere in the middle.

While retail is due for a pullback, this doesn’t mean that the market is as well. What we need to watch is whether institutions increase their exposure to the market quickly or slowly.

They are the driving force behind moves in the market so they will tell us the story of where we go from here.

Watch this video where I break it down further and what I expect to happen: