But for now it seems a bit oversold on 4 Hrs time frame, so the bulls will likely try to protect 3500 and the weakest chain can show some correction today and/or tomorrow towards 3600 +/-. That is the sell zone now for both those who wanna get out and for those who wanna go short. Get ready, this will affect all markets. The structure of the long lasting US market is deteriorating a lot.
So far talking heads are telling it is a portfolio restructuring, re-allocation, etc. But the fact is, the previous leaders got very weak, investors try to squeeze the last juice of the mkt and swing from leaders to lagging stocks. Technically this is just bringing closer the end of the market and the major reversal. No one should believe that in the long run it wiill not effect European or any other stock markets. We must start to monitor the global picture together, I mean the common behaviour of the major and broad stock indexes. Sell in May? Or sell in April? We'll see, but the warning signs all around are gathering.
What bothers me about the friday sell-off opposite to the previous ones recently made is that it had practically no ground or reason for it. It just fell - they just sold, and sold hard. It is not a numbers crisis, it is just a sell-off for now. But if dips lower, it will spill.
We do not have to understand the "reasons". For example recently I do not even look on economic datas, or headlines, as those just cause short term noise and volatility in any instruments.
What we have to understand is the momentum, the price action, and the probabilities of trends that we have to follow. We can not predict the future, so where prices will exactly go (even though most technical analysts try to be predictive), and also everything what is behind price movements is always a "history" :-).
But anyway, I completely agree with you, and like your chart. Thx a lot!
So let's have a check list:
Market leverage is at all time high, higher than any time before in history.
"Mom and Pop" cash funds are at 34 years low, meaning that each 1 billion dollars could now only buy 0,33 % of the shares of SP500 index.
Classic bond funds, like PIMCO and Friends, keep all time high equity exposure, to catch up some performance somehow. (Bond funds (!), which should never touch equities at all, but this is just my personal view.)
Active investment managers are holding a very high stock exposure too, read as an average manager keeps a 91 % net long exposure.
So maybe there's still "some cash left on the sidelines", but that will very quickly evaporate when these mkts sell off, so bulls will have less cash on the sidelines. :-D.
So basically I think investors have a lot more stocks and risk, than cash (risk free element of portfolio).
Anyway I still do not care too much about these datas, since the only thing that matter is the price action and the chart! I just find them interesting.