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US S&P 500 Looks to Rally Even Further

US S&P 500 Looks to Rally Even Further

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 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.

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