S&P Price Might Dip Lower on Sentiment

Net-Long S&P Positions Dip Below 50%

US 500: Retail trader data shows 48.5% of traders are net-long with the ratio of traders short to long at 1.06 to 1. In fact, traders have remained net-short since Apr 03 when US 500 traded near 2636.92; price has moved 0.6% higher since then. The number of traders net-long is 8.0% higher than yesterday and 6.0% higher from last week, while the number of traders net-short is 1.0% lower than yesterday and 0.5% higher from last week.

S&P May Reverse Lower

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 Dylan Jusino, DailyFX Research