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S&P 500 Looks to Rally onto Fresh Highs

S&P 500 Looks to Rally onto Fresh Highs

David Rodriguez, Head of Product


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

US S&P 500– Retail traders remain very aggressively net-short the SPX500—a CFD which tracks the price of the US S&P 500—and a contrarian view of crowd sentiment leaves us firmly in favor of buying into S&P 500 gains.

As we have noted through the past three weeks, however, the clear caveat remains unchanged: such impressively one-sided positioning often coincides with significant price extremes and reversals. These extremes are by definition only clear in hindsight, and the S&P 500 has continued onto fresh highs despite our warnings. We would ultimately need to see a substantial shift in crowd sentiment to call for a sustained turn lower.

See next currency section: EURUSD - Euro Remains Likely to Test Key Highs

--- Written by David Rodriguez, Quantitative Strategist for

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