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S&P 500 in a Precarious Position – What to Watch

S&P 500 in a Precarious Position – What to Watch

David Rodriguez, Head of Product

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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 continue to hold a near-record short position in the SPX500, which tracks the fair value of S&P 500 futures prices. A purely contrarian view of crowd sentiment points to further stock market gains.

But we will repeat what we said last week—such heavily one-sided sentiment often coincides with significant price extremes and reversals. The difficulty is that such reversals are by definition only clear in hindsight, and we would need to see a marked shift in retail positions to confirm any such moves. Until that happens we see little choice but to cautiously favor further strength.

See next currency section: EURUSD - What do we Need to see for a Euro Breakout?

--- 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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