The level of volatility in the S&P 500 has of late shown more variability than small caps stocks. Between the devaluation of the Chinese yuan and the strengthening dollar, it seems we are defying the physics of financial laws. There is a lot of noise in the markets at the moment and the trading volumes are significantly higher in your large cap stocks, than your small caps, which could explain some of the large swings in the buy and sell numbers of large cap stocks. Is it all really just noise? Should we consider adjusting our financial models and base assumptions or is this just a major anomaly at this point in time?
Some very smart and rich guys like David Tepper are saying it's not a bad idea to take a little off the table these days. A hedge that has done well the last several weeks: http://www.morningstar.com/etfs/ARCX/SH/quote.html
A lot of this is pure noise. It's the way the market works - it will grab onto a narrative and run with it. That said, we have seen a confluence of factors that would naturally be an issue for the market. Events in China, the Greek crisis and US rate considerations are all issues that would normally have an impact on how people put their money to work. Given the extent of the market's run in recent years and the market valuations, it makes sense on lightening the load if you are still overweight.