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S&P 500 Once Again Looks like a Buy

S&P 500 Once Again Looks like a Buy

2016-03-31 16:45:00
David Rodriguez, Head of Product
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S&P 500 Once Again Looks like a Buy

Why and how do we use the SSI in trading? View our video and download the free indicator here

US S&P 500– Retail CFD traders have never been so short the SPX500, and a contrarian view of crowd sentiment points to further S&P gains. The clear caveat and difficulty is that such heavily-sided sentiment often coincides with major price extremes—traders are often most short at major tops. These extremes are nonetheless only visible in hindsight, and we would need to see a substantial sentiment shift in the opposite direction to call for a meaningful pullback.

It was only last week we claimed such a move had occurred, but clearly we were caught on the wrong side of a major rebound higher. We will continue to watch for further S&P gains until we see a more lasting shift.

See next currency section: EURUSD - Euro Puts our Trading Strategy to a Real Test

--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com

To receive the Speculative Sentiment Index and other reports from this author via e-mail, sign up for his distribution list via this link.

Contact David via Twitter at http://www.twitter.com/DRodriguezFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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