Smart / Dumb Money Confidence
Institutional and retail confidence, scored daily. The signal fires only when the two disagree at opposite extremes.
Neutral. No signal: smart money 0.32, dumb money 0.43. A signal needs one above 0.68 and the other below 0.35 at the same time. As of 2026-10-19.
Each crowd is scored 0 to 1 against its own past year: 0.90 means more confident than on 90% of recent days.
What this measures
Two daily confidence scores, built from options volumes and cross-asset prices. "Smart money" tracks what commercial hedgers and institutions typically do; "dumb money" tracks retail investors and short-term speculators. Neither line observes who is actually trading. Read together, they form a smart money / dumb money confidence indicator for the S&P 500.
How to read it
One crowd at an extreme is mood, not a forecast. The signal fires only when they disagree at opposite extremes: smart money above 0.68 with dumb money below 0.35 reads Bullish, the reverse reads Bearish. The labels describe the outlook for the S&P 500, not either crowd's mood, which is why Bullish coincides with fearful retail.
Why the thresholds are not symmetric
Retail confidence spends more time high than low, so 0.35 marks genuine capitulation, while 0.68 on the institutional line is merely firm buying.
What goes in
How much the record proves
Prior-signal returns are computed from the same two-year series drawn on this page, so they describe this window rather than test the signal across many market cycles. No long-run backtest stands behind them.