Forecasts Favor Further Stock Market Declines
SPX500 –Clear retail sentiment extremes timed almost the exact top in the S&P 500, and more recent positioning swings leaves us in favor of SPX500 declines.
Trade Implications SPX 500– It’s worth noting that retail crowds remain net-short the SPX500 contract—that would normally leave us bullish. But the substantial swing in positioning through recent weeks makes the trend shift fairly clear. As with the Dollar more broadly, we would allow for the possibility of a short-term pullback (SPX500 bounce), but we would treat that as an opportunity to get short.
--- Written by David Rodriguez, Quantitative Strategist for DailyFX.com
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