SPX500 –Retail CFD speculators are near their most short the SPX500 contract on record, and we see little choice but to favor further strength.
Trade Implications – Our retail sentiment data shows that the number of orders short SPX500 outnumber those long by a massive 8.8 to 1 as the contract trades near record-highs. In fact, short interest has gained a further 24 percent since last week, while total longs have fallen 8 percent. There’s obvious risk of a significant correction given impressive advances, but we would warn against joining the crowd as stocks continue pressing to fresh gains.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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