Is an Institutional Investor Smoke Alarm Going Off Now?
Why do people have smoke alarms in their house?
Obviously, it is to warn them that there could be a fire, a fire developing, or sometimes it just means you burnt the toast.
In any case, you at least check it out and find the culprit. If it is burnt toast, you fix the problem and move on. If turns out to be a "potential" fire situation, you take a cautious stance.
This is courtesy day ... a day where we share one of our paid subscriber charts for free members.
Today's chart involves the analysis of what is happening between the VIX and what Institutional Investors have been doing since February 13th.
First, you understand how the VIX works ... a higher VIX signifies higher fear levels and the market typically moves down. A lower VIX signifies higher confidence (or sometimes complacency), and the market moves up.
So what has happened to the VIX since February 13th? Today's chart provides the answer. The VIX (volatility index) moved down and the market moved higher.
But, a smoke alarm may be going off? Why? Because of what the Institutional Investors have been doing relative to buying and selling since then. As this chart show's, the Institutional Buying went down, and the Institutional Selling went up.
That is the opposite of what you would expect for a market moving up. Apparently Institutional Investors are getting nervous and reducing their exposure. They are still in Accumulation so things are still okay at this moment ... but a smoke alarm is going off in the background.