ChOTD-4/15/14 Relative Inverse ETF Volume Now At Fear Levels Marking Recent Lows

In last Friday’s ChOTD, we indicated that Relative Inverse ETF Volume (the percentage of volume traded in inverse ETF’s vs. total market volume) had not yet reached levels reached at prior market lows over the past 18 months. That has changed over the past few days.

On a 1-day basis, the Relative Inverse ETF Indicator reached 1.69% on Friday, the highest level since June. And on a 5-day basis, it reached 1.28 yesterday, above the 1.25 level that has been the minimum threshold for market bottoms during this period. If the market does not form a low soon, it will indicate a change in market character. For example, it may signify that the market has entered either a topping formation or trading range. We will continue to monitor the developments here.