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US 500: Retail trader data shows 16.3% of traders are net-long with the ratio of traders short to long at 5.13 to 1. The number of traders net-long is 6.0% higher than yesterday and 3.4% lower from last week, while the number of traders net-short is 1.9% higher than yesterday and 6.1% 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.
--- Written by Christopher Vecchio, CFA, Senior Currency Strategist
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