More analysts are tracking exchange traded fund data and trading patterns to get a feel for the overall market’s stance on risk.
WSJ.com’s MarketBeat points out that ETFs may play a role in determining market conditions, especially when ETF trading volumes are high compared to individual stocks.
Currently, daily ETF trading volumes are around 30%, and individual stocks make up 70%, according to the report.
“People want to avoid loss more than they will try to seek gains, and ETFs are living proof of that,” said a market strategist.
“Investors turn more to ETFs as a hedge when they can’t count on fundamental stock picking to generate good results,” MarketBeat reported.