Here is some proof as to why there is a good chance that the stock market is peaking at these levels. Please comment with any questions you have!
This first picture is a put to call ratio. This measures the number of people going along on the market versus the number of people going short the market. We typically see large spikes in the ratio right before a correction.
Below, they assessed the put to call ratio during the dotcom bubble. Contrarian indicators is what smart money uses to make calculated bets as to the general direction of the market moving forward. It's not an exact science, but this measurement has worked many times in the past.
This shows the smart money investors went net short in early 2000, and went net long towards the end of 2002, right as the market was bottoming.
Again, the smart money called the peak at the end of 2007, and the bottom in early 2009.
Again in 2011, 2015 and 2020.
The indicator spiked at the end of 2021, at levels not seen since 1984, and again in August 2022, which was then proceeded with a correction that lasted through October 2022.
The current volatility of the put to call ratio has spiked even faster than at the end of 2021. This is a leading indicator that the smart money is expecting a dramatic decline this year.
This chart shows that we are closer to a top than a bottom, and that the trend will likely be down through the end of 2023.
I figured I would throw this last one in for good measure, as Larry Fink has sold a whopping 7% stake in his company, Blackrock 😳...
Here is the thread to that account Game of Trades:
Thanks for reading, and have a blessed weekend!