SPX500 –At the risk of sounding repetitive, retail CFD speculators remain aggressively short the SPX500 contract and we maintain our contrarian forecasts for further record-peaks.
Trade Implications – According to our proprietary trader positioning data, there are currently 6.2 open positions short the SPX500 for every one that is long. That sounds like extremely one-sided sentiment, and it is. But it’s worth noting that we’ve seen the same ratio go as high as 12:1 in the past two months.
Warning signs on a potentially significant turnaround are everywhere, but as long as the crowd continues to sell in anticipation of a peak we’re unlikely to see an important turnaround.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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