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US S&P 500– A major shift in retail trader positions warns that the S&P 500 is likely to continue higher through the foreseeable future. Last week we admittedly claimed the opposite— one-sided sentiment pointed to further stock market tumbles. At the time our data showed 58 percent of total SPX500 positions were long, and a contrarian view of crowd sentiment pointed to further losses.
Since then, however, our retail sample shows the number of short positions has surged by 60 percent and the crowd is now marginally net-short. The dramatic turn in retail sentiment warns that the S&P 500 may indeed continue onto fresh highs.
See next currency section: EURUSD - Euro Likely to Trade Lower, but Large Breakdown Remains Unlikely
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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