SPX500 Forecast to Trade to Record Peaks
SPX500 –Retail CFD speculators are now their most short the SPX500 contract on record, and we see little choice but to take a contrarian bias to crowd sentiment and calls for fresh SPX500 highs.
Trade Implications – Total short interest has surged to its highest on record, while net-positioning now shows that short positions outnumber longs by nearly 9:1. We have maintained our calls for SPX500 strength as the trading crowd has remained steadily net-short since November of last year.
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.