What the sentiment indicator below suggests is consistent with the big money index is showing. While the market is still quite resilient with any bit of dips being eagerly bought up, the upside seems also quite limited when big money is retreating. No one knows what will trigger a waterfall crash but the risk is certainly not low in this kind of setting. Be careful and trade appropriately.
by SentimenTrader:
You wouldn't know it by the last couple of days, Friday in particular, but the past few months have been dominated by late-day selling pressure.
The Cumulative Last Hour indicator looks at the last hour of trading in the S&P 500 fund, SPY. If the fund rises during that hour, then the indicator adds 1 to the running total. If it drops, then it subtracts 1.
Recent months have seen a continual erosion in the indicator, to the point where it's at the lowest level in 6 years. When stocks have been persistent hitting new highs while the Last Hour indicator was plumbing new lows, it has been a warning sign.
What may be especially notable about the current behavior is just how persistent the selling has been during the last hour. Over the past 3 months, the indicator has dropped 5%, which doesn't sound like a lot, but it's the biggest drop in 25 years.
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