The SPDR S&P 500 Trust ETF (SPY) is tumbling following a massive rally that's taken a few breathers since March isn't surprising. Our service's sentiment indicator has been flashing warning signs for weeks, prompting us to highlight the risk of a pending market drop here and here.
On August 17, I wrote:
The ratio provides insight into sentiment, and currently, its 50% reading puts it in rarefied air only seen twice before since we began compiling this data in 2013. Ominously, both of the previous 50% plus readings preceded significant declines in the