Part 5/9:

It is argued that smart money, guided by data and quantitative analysis, often makes more informed decisions compared to retail investors, who are more prone to emotional reactions. Thus, watching the actions of smart money provides valuable insights.

Key Sentiment Indicators

1. VIX (Volatility Index): The VIX, often called the fear index, measures the market’s expectations of future volatility. A low VIX indicates complacency among option writers, suggesting a potential downturn ahead, as history has shown that periods of low volatility are often followed by market corrections.