Before you say ah shit here we go again with another regard screaming "recession" let me preface by saying I'm still bullish on the market in the near term.
Here I present to you one of the charts of all time. Those squiggly lines in blue show the confidence spread of smart money to retail. Think of it like this, institutions (aka smart money) are long term investors that are greedy when retail is fearful and fearful when retail is greedy, which here means that peaks are when smart money is calling the bottom and buying and valleys are where only retail is playing. In other words, a trough signals a reversal is likely in the near future and the market is too expensive.
Now if you look carefully you'll see smart money isn't always successful at calling the top and if retail continues to buy strongly they eventually FOMO back in. But in places where the graph has dropped into a trough rapidly, a downturn follows. We have some time before smart money confidence bottoms but we're likely not too far away.
A few things I've noticed on the market that support this theory:
1. Volumes have been lower recently, which could mean retail activity is the dominant force in the market right now
2. Soft landing is not a guarantee although the odds are alright for now, but retail is euphoric about it and we're heading into extreme greed
3. Smart money may be risk-off till after the election
4. Valuations are insane right now. Banks, energy, some pharma, and telecom are the only sectors not overvalued to the tits in the S&P 500
End of the day I'm just another regard like you but I think the time has come to be cautiously optimistic. I'm setting some sensible stop losses on my holdings. End of the day I hope I'm wrong and the top is not even close but tread carefully in the next few months
Smart money may have called the top is in
byu/Whitemamba2798 inwallstreetbets
Posted by Whitemamba2798
32 Comments
Maybe, but maybe not 
If you change the vertical scale on black and blue lines you can make it look like anything.
Calls on the blue squiggly line. Looks like it will go up.
Without a very meaningful increase in unemployment there’s no chance of a recession. Too many people own their home with a rock bottom interest rate and companies are profitable as fuck. Commercial real estate is iffy but with rates coming down even that should be fine even though there will probably be some pain felt.
I just don’t see it
Temporary top vs bear market coming are two very different things. I can see a 3-5% pullback coming, so I’m trading options that way, but I see spy and qqq ending the year higher than they are now.
I think its reasonable to expect a pull back in Oct until the election results, but once the results are in we’re blasting regardless of the results. People just want to know what’s going to happen.
It’s already an anomalous month where Sept is going to be positive. History is a good indicator until it isn’t.
Don’t you tell them bearish things bud, if they can read they’d be real upset right now
Maybe
Got a feeling the blue squiggles might be signaling a shift soon. Time to keep an eye on those stop losses.
Looks like a green bear shitting in the forest to me.
Four colors has me nervous. That’s halfway to my 8 crayon limit.
Second extreme bear post I’ve read in the last hour
Calls it is
Bear market in 2029. Not before Dow 60k
Bruh, I’m not even gonna read your post Bers are fucked Buy calls if you like money 
Ah shit here we go with another regard screaming “recession”
SPY will definitely end the year off higher than 575 but I see a small pullback coming. Not a recession, but a pull back
I looked at this graph and the first thing I saw was January – May 2024, as it is the supposed lowest “smart money confidence” and straight up nonstop trend up. I then looked at July – August 2023 and saw the same thing. I then looked at a couple of the massive drops, and it looks like they lag the SPX drop more than it looks like it leads it
Am I interpreting this graph and OP’s point incorrectly?
I could take a shit in a box and make a chart and call it guaranteed too
That’s what I’ve been hearing for the last 3 years. They’ll get it right
One day I’ll figure out why everyone puts smart money confidence on top, when logically it’s inverted. One day. *shakes fist*
Post position or ban
The correlation between those two lines is suspect at best.
Institutions are pumping during premarket and selling to retail during trading hours: [https://www.youtube.com/watch?v=GPJSeroYMKw&t=207s](https://www.youtube.com/watch?v=GPJSeroYMKw&t=207s)
Thank God, I was worried about my spy calls, this brought me great comfort knowing they will print.
That blue line is all over the place and doesn’t seem to correlate to anything
You’re probably right. People don’t understand that the stimulus from rate cuts don’t just magically make their way to the market.
Risk on assets nosedive after rate cuts and they don’t pounce again until the Fed is DONE cuttin those rates. Big money wants cheap money. It’s not until they push that shit way down by before the stimulus reaches the markets. 50 lower isn’t shit when it was 0 a few years ago.
When the money is ACTUALLY cheap again it will go up. Until then expect down.
What if institutional “Smart” money have already been positioned months ago, and retail is only catching up now?
Ah shit here we go again
Diagonals on spy got it
Calling institutional investors “smart money”?
Believe me, most of them are not any smarter than the posters on wallstreebets.
When wsb thinks there’s a crash coming, there’s a crash coming.