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US S&P 500 – A sharp shift in retail trader positions warns that the US S&P 500 may continue onto fresh lows until further notice. Our data shows there are currently 1.4 open long positions in the SPX500 for every 1 that is short; a contrarian view of crowd sentiment leads us to believe it may fall further.
Since last week total long interest has surged 61 percent while short positions have remained almost exactly unchanged. It’s certainly true that sharp S&P 500 declines make near-term corrections likely. Yet the severity of the shift in crowd sentiment warns that losses remain more likely.
See next currency section: EURUSD - Euro Will Pull Back Eventually, but our System Forecasts Gains
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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