Sentiment Suggests Mixed Trading Bias

Sentiment Suggests Mixed Trading Bias


SP500

NUMBER OF NET-LONG TRADERS INCREASE BY 30.8% FROM LAST WEEK

US 500: Retail trader data shows 29.4% of traders are net-long with the ratio of traders short to long at 2.4 to 1. In fact, traders have remained net-short since Jan 07 when US 500 traded near 2486.11; price has moved 14.3% higher since then. The percentage of traders net-long is now its highest since Mar 08 when US 500 traded near 2748.18. The number of traders net-long is 12.1% higher than yesterday and 30.8% higher from last week, while the number of traders net-short is 1.3% lower than yesterday and 2.7% lower from last week.

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S&P 500 PRICE TREND 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





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