S&P 500 May Have Set Significant Top
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US S&P 500– The US S&P 500 looks at considerable risk of reversal as retail traders pull back from a potentially significant sentiment extreme. It was only two days ago when we noted a record net-short position in the SPX500, and indeed we’ve since seen traders pull back as the index has reversed.
Traders are often their most short at important market tops, but these are by definition only clear in hindsight. The potential sentiment extreme and subsequent pullback suggests that we have indeed seen a fairly significant market top.
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--- 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.