S&P 500 Could Turn Lower, but Not Quite Yet
SPX500 –Trading crowds remain incredibly short the SPX500, which tracks the fair value of the S&P 500 futures price. This in itself suggests the stock market rally isn’t over yet.
Trade Implications SPX 500– There are over 4 traders short the SPX500 for every one that is long, and a contrarian view of crowd sentiment leaves us in favor of S&P 500 strength. It’s always tempting to claim that the recent correction in stocks will be enough to produce THE reversal. Yet we don’t seen enough evidence to support such a claim, and indeed stocks seem poised for fresh record highs.
--- 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.