The line depicts a two-week moving average of the NAAIM managers’ responses.
It is important to recognize that the NAAIM Exposure Index is not predictive in nature and is of little value in attempting to determine what the stock market will do in the future. The primary goal of most active managers is to manage the risk/reward relationship of the stock market and to stay in tune with what the market is doing at any given time. As the name indicates, the NAAIM Exposure Index provides insight into the actual adjustments active risk managers have made to client accounts over the past two weeks.
I have correlated the index line with its 21 MA , so below 21 MA determines weakness and breaking determine strenght in the sentiments.
How to use it rationally?
Try to find the "Divergence" .
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