Only 30% of Retail Traders are Net-Long
US 500: Retail trader data shows 30.5% of traders are net-long with the ratio of traders short to long at 2.28 to 1. In fact, traders have remained net-short since May 03 when US 500 traded near 2653.82; price has moved 10.4% higher since then. The percentage of traders net-long is now its lowest since Sep 04 when US 500 traded near 2896.8. The number of traders net-long is 8.3% lower from last week, while the number of traders net-short is 12.1% higher from last week.
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Current Sentiment Suggest That Prices May Climb Higher
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests US 500 prices may continue to rise. Although traders are further net-long than last week, the combination of current sentiment and recent changes gives us a US 500-bullish contrarian trading bias.
*Due to the loss of intra-day data, the red and blue lines on the chart are not accurate*
--- Written by Jake Schoenleb, DailyFX Research