One of the most underrated indicators is the NAAIM Exposure Index. This index represents the aggregate equity exposure for members of the National Association of Active Investment Managers (NAAIM). As active investors, NAAIM members respond dynamically to market conditions and investment fundamentals. Their collective positioning can provide insight into market sentiment and, potentially, future moves. This indicator is reported weekly and is available at: https://naaim.org/programs/naaim-exposure-index/. In the spirit of full disclosure, I am a member of NAAIM and routinely contribute to this index.

Like many indicators, the Exposure Index is best suited for a nuanced interpretation. According to my research, this indicator cannot strictly be used to predict the market. In other words, setting your own portfolio's exposure to the previous week's value does not outperform the market. Any such indicator would be considered a Holy Grail by investors.

I watch for major swings in the NAAIM Exposure Index. For example, if exposure drops by 50% over two weeks, that could be a warning sign for the market. Such a major change is only possible when a majority of members all adjust their portfolios in the same direction. Given the talent of this group, a significant consensus shift signals to me important changes in market conditions. However, it's critical to interpret this index in conjunction with other financial indicators and broader economic data.