Need to See a Larger Move to Confirm S&P 500 Top
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SPX500 – Retail speculators have significantly scaled back short positions on the SPX500 contract, which tracks the fair value of the S&P 500 futures price. A sharp shift in sentiment warns we are at a crossroads.
Trade Implications SPX500 – Several weeks ago we argued that stock markets seemed “unbreakable”, but as if on cue the SPX500 has pulled back sharply from record-highs. Crowds remain marginally net-short, which would normally give us contrarian signal that stocks are likely to continue higher. Yet we’ll need the S&P 500 to hold the psychologically significant 1900 mark to have any confidence in further gains.
See next currency section: NZDUSD - New Zealand Dollar Targets Fresh Declines
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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