📈 Smart Money vs. Dumb Money

This is giving us a signal.

Smart Money vs. Dumb Money

For those of you who watch my daily YouTube videos, you know that I often look at the Smart Money vs. Dumb Money Confidence chart, or as we call it in the community Institutions vs. Retail Confidence.

This gives us signs as to how retail traders are acting and how institutions are acting. It helps us make sense of what we are seeing in the market and sometimes gives us insight into what may be coming next.

There is something pertinent I am seeing that I wanted to share.

Retail Buying

Typically what we see with this chart is that when retail is buying and institutions are selling, the market goes higher.

Something important happened recently and you can see it below:

We finally crossed with retail outpacing institutions in terms of buying. You can see from past trends that when retail buying is strong, the market pushes higher, and then once retail buying began to fall off, the market dropped with it.

This cross is significant and could be a sign of a longer term rally in the market.

Keep in mind that you still need to contend with the other legs of the stool - macroeconomics and fundamental analysis.

Watch this video for more detail on the Smart Money / Dumb Money Confidence chart: