US S&P 500 Looks to Rally Even Further
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 remain extremely net-short the SPX500, which tracks the fair value of the S&P E-mini futures contract, and a contrarian view of ‘crowd’ sentiment has kept us firmly bullish. Our data shows there are a remarkable 10 open positions short for every 1 long—91 percent of all open positions are short.
The clear danger is that retail traders have often been ‘right’ at major trend turnarounds, and the extraordinarily net-short positioning warns of a potential top. But such extremes by definition are only clear in hindsight.
We will remain cautiously bullish until we see substantive evidence of a sentiment reversal.
See next currency section: EURUSD - Euro Forecast to Strengthen Further versus US Dollar
--- Written by David Rodriguez, Senior 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.