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IG Client Sentiment

68% of Traders are Net-Long

US 500: Retail trader data shows 68.7% of traders are net-long with the ratio of traders long to short at 2.19 to 1. In fact, traders have remained net-long since Dec 06 when US 500 traded near 2707.22; price has moved 12.4% lower since then. The number of traders net-long is 11.8% higher than yesterday and 9.8% higher from last week, while the number of traders net-short is 8.1% higher than yesterday and 8.7% lower from last week.

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S&P 500 Sentiment Gives a Strong Bearish Bias

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests US 500 prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger US 500-bearish contrarian trading bias.

--- Written by Fan Xu, DailyFX Research