What does the recent divergence between institutional trimming and cautious retail ETF outflows indicate about the market’s current dynamics?
Why is this the correct answer?
This is correct because institutions often rebalance portfolios by trimming positions when prices peak, while cautious retail investors may withdraw through ETF outflows. Beginners should note this divergence highlights two different behaviors: profit-taking by large players and risk aversion by smaller participants, signaling mixed market sentiment.
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