SPY Traders Are Jumping Into This Market. Monday's rise took the S&P 500 Index to a new all-time high. As we can see from the chart above, the recent market rise has been accompanied by quite a spike in the ratio of volume of the S&P 500 Index ETF (SPY) to NYSE Volume. In the recent past, spikes in SPY volume relative to general market volume have occurred at market lows as a function of panicky selling. To that degree, SPY traders as a whole have not looked like smart money; spikes in their participation have been a contrary indicator. This was particularly evident during the market weakness of late February/early March.
This is the first time I can recall during the bull market when we've had an elevated ratio of SPY:NYSE Volume on a market rise. It invites the perception that, just as SPY traders panicked on the downside during the Feb./Mar. weakness, they are now panicking to the upside, eager to get into a market making fresh all-time highs.
I'm watching closely to see if this, too, proves a contrary indication of sentiment.
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