US Stock Market Dumb Money Index Screams ‘Sell Now!’

Stock markts NTB 1

There are all kinds of indicators and metrics in the stock market that assist traders and investors.One type of indicator in the stock market is known as the “contrarian signal”. This is a market indicator which indicates the opposite of what one might intuitively conclude from the signal itself.One such stock market indicator is the “dumb money confidence index”. For better or for worse, it is generally regarded that institutional and hedge fund investors are smarter than individual retail investors.Consequently, individual retail investors are known as “dumb money”.The theory behind confidence indicators is that if everyone is bullish and/or confident, then all of the people who could be buying securities in the stock market are already in the market. That suggests that the market is closer to a top.The reverse is also true. If everyone is bearish and/or not confident, then all of the people who could be selling securities…

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