SPX500 Forecast To Trade To Record Peaks

By David Rodriguez, Quantitative Strategist

SPX500 ?Retail CFD speculators are now their most short the SPX500 contract on record, and we see little choice but to take a contrarian bias to crowd sentiment and calls for fresh SPX500 highs.

Trade Implications ? Total short interest has surged to its highest on record, while net-positioning now shows that short positions outnumber longs by nearly 9:1. We have maintained our calls for SPX500 strength as the trading crowd has remained steadily net-short since November of last year.

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.

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