Active investment managers have been active: NAAIM exposure index dropped to 47 this week, lowest level in a year.
It's dropped 57 points over the past two weeks, third largest such decline in history (only larger were Mar 2020 and Jan 2008). pic.twitter.com/5C94MR9Sip
— Willie Delwiche (@WillieDelwiche) May 13, 2021
Today’s Chart of the Day was shared by Willie Delwiche (@WillieDelwiche). It’s a chart of the S&P 500 over the past four years (dark blue), along with the NAAIM Exposure Index (light blue). The S&P 500 hasn’t even pulled back 5%, and yet this sentiment indicator just plunged to its lowest level since March 2020. As Willie points out, this marks the third-largest two-week decline in the history of the NAAIM Exposure Index. So, does this mean sentiment has been reset and a tradeable bottom is in? In a comment to The Chart Report, Willie said, “This drop in bullish exposure was probably a result of active fund managers being overweight Tech and having to unwind those positions. So, while this is the lowest exposure we’ve seen in a year, I think it could fall even further before sentiment is truly reset and a tradeable bottom is in.”