FxWirePro: S&P500 broader bull-trend still intact; retail sentiment in favor

Bulls remain in charge,

• Since bottoming in January, the U.S. benchmark stock index S&P500 has returned 16 percent so far, and price actions suggest that the benchmark likely to continue its upward march.
• While selling is expected at the peak, our forecast suggests that the S&P500 index likely to test 2900 area before any meaningful selling pressure hits the index.
• The index (SPX500) is currently trading at 2850.

Retail sentiment remains in favor of the bulls,

• The sentiment reports from IG Markets, which is a UK-based company providing trading in financial derivatives such as contracts for difference and financial spread betting, strongly suggest that the broad trend is still bullish for S&P500 index.
• IG markets’ retail positions data provide a glimpse to retail traders’ positions, which are largely used as a contrarian indicator since retail positioning moves in the opposite direction to market movements.
• As of today, according to data from IG markets, only 32 percent of retail positions are bullish on S&P500, while 68 percent are on the short side, suggesting further upside possibility for the S&P500. However, long retail positions have increased from 24 percent to 32 percent.