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Forecasts Favor Further Stock Market Declines

By , Quantitative Strategist
27 June 2013 14:20 GMT
ssi_spx500_body_Picture_16.png, Forecasts Favor Further Stock Market Declines

SPX500Clear retail sentiment extremes timed almost the exact top in the S&P 500, and more recent positioning swings leaves us in favor of SPX500 declines.

Trade Implications SPX 500 It’s worth noting that retail crowds remain net-short the SPX500 contract—that would normally leave us bullish. But the substantial swing in positioning through recent weeks makes the trend shift fairly clear. As with the Dollar more broadly, we would allow for the possibility of a short-term pullback (SPX500 bounce), but we would treat that as an opportunity to get short.

--- Written by David Rodriguez, Quantitative Strategist for

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27 June 2013 14:20 GMT