SPX500 Sentiment Plainly Favors Record Highs
SPX500 –At the risk of sounding repetitive, retail CFD speculators remain aggressively short the SPX500 contract and we maintain our contrarian forecasts for further record-peaks.
Trade Implications – According to our proprietary trader positioning data, there are currently 6.2 open positions short the SPX500 for every one that is long. That sounds like extremely one-sided sentiment, and it is. But it’s worth noting that we’ve seen the same ratio go as high as 12:1 in the past two months.
Warning signs on a potentially significant turnaround are everywhere, but as long as the crowd continues to sell in anticipation of a peak we’re unlikely to see an important turnaround.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.