SPX500 Probably Set a Significant Top
Trade Implications – To quote last week’s SSI report: “Total short interest in the SPX500 contract remain near record-highs as there are far too many retail traders trying to catch THE top. Yet it’s far more interesting to note what’s going on with the other side of the trade: the number of open orderslong surged by over 50 percent in the past week.”
Since then long interest has risen a further 23 percent, while short interest is down 20 percent in the same stretch. It’s never fun to be faked out on a bear trap (in plain English, selling into a breakdown that’s quickly retraced), but we think this could be the start of a much larger decline.
--- 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.