NUMBER OF NET-LONG TRADERS DECREASE
US 500: Retail trader data shows 34.9% of traders are net-long with the ratio of traders short to long at 1.87 to 1. In fact, traders have remained net-short since Jan 07 when US 500 traded near 2449.4; price has moved 10.8% higher since then. The number of traders net-long is 21.5% lower than yesterday and 23.7% lower from last week, while the number of traders net-short is 40.5% lower than yesterday and 35.8% lower from last week.
For more in-depth analysis, check out the Q1 2019 Forecast for Equities
S&P 500 PRICES MAY SOON REVERSE
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 Nancy Pakbaz, CFA, DailyFX Research
Follow Nancy on Twitter @NancyPakbazFX