S&P Remains a Buy until this Changes
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US 500: Retail trader data shows 20.1% of traders are net-long with the ratio of traders short to long at 3.98 to 1. The number of traders net-long is 7.7% higher than yesterday and 18.9% higher from last week, while the number of traders net-short is 2.2% lower than yesterday and 4.6% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests US 500 prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current US 500 price trend may soon reverse lower despite the fact traders remain net-short.
We would nonetheless need a much larger shift towards 'crowd' buying before we called for an end to the much-larger S&P 500 uptrend.
See next article in this week’s report: EURUSD - Our Euro Forecast may Shift as Traders Show Change of Heart
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.