SPX500 –Retail CFD speculators are near their most net-short the SPX500 contract on record, and such incredibly one-sided sentiment suggests that selling at these levels is dangerous.
Trade Implications – Our retail sentiment data shows that the number of orders short SPX500 outnumber those long by an almost-unbelievable 10.6 to 1. Our data shows that such one-sided sentiment often comes at the top of the trend, but we can’t emphasize enough that THE extreme is only clear in hindsight.
As it stands we would equate getting short at these levels as roughly equivalent of jumping in front of a freight train.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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