S&P 500 Rally Shows Real Signs of Stress
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SPX500 –Retail CFD speculators remain heavily short the SPX500 contract, which tracks the fair value of S&P 500 futures. Yet a more recent shift in positioning warns that the stock market rally could soon run out of steam.
Trade Implications SPX500 – Crowd positions were recently at their most short SPX500 on record as the S&P pressed on to fresh highs. It’s worth noting however that short interest is down over 20 percent in the past 3 weeks. Long interest has risen by over 30 percent through the same stretch.
It’s been a fool’s errand to try and call THE top in stocks, but it seems risky to join crowds in buying the recent S&P pullback.
--- 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.