SPY - My Number 1 Indicator To Predict Market Corrections
We are witnessing a market environment with extreme sentiment changes. After the unprecedented ~34% drop of the S&P 500 (SPY) at the beginning of March, the stock market bounced back heavily by ~60% to put the year-to-date return at ~+10%. The Nasdaq (QQQ) performed even better, gaining 33% to date.
This recent melt-up in the stock market was a consequence of extreme market greediness with investors believing that the Fed's interventions (low interest rates and money printing) will lead to ever-increasing stock prices. However, the parabolic move of momentum stocks like