S&P 500 Remains a Buy
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US S&P 500– Aggressive retail selling of the SPX500, which tracks the fair value of S&P 500 futures prices, acts as strong contrarian signal that the US equity index will likely continue higher through the foreseeable future. Our data shows 78 percent of total open SPX500 positions are short; we most often look to do the opposite and buy.
A key caveat is that these sharp moves can sometimes occur at key sentiment and price extremes—in this case it is possible the S&P 500 sets a near-term top. Yet we said the same thing 10 days ago and price has continued higher. We will call for gains until we see a sharp shift in the opposite direction.
See next currency section: EURUSD - Euro Forecast to Stay Below Key Price Resistance Levels
--- 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.