March 8, 2010

Small Speculators Continue To Bet On The Short Side

According to the CFTC, small speculators continue to bet on the short side of the market:

"There was very little change this week in the S&P 500’s commitment of traders report. Small speculators reduced their short positions marginally, but remain heavily net short. As a contrarian indicator this report continues to spell potentially bad news for the bears. The small speculators have missed the entirety of the March 2009 rally as institutions have increased their bullish positions. We continue to see small speculators on the other side of this trade." in the Pragmatic Capitalist

This is the only piece of the puzzle that does not point to a severe stock market correction. Small speculators actions are an important stock market barometer and this indicator is pointing for higher prices. (read: US Stocks: No More Fuel For The Rally)

Related RTF`s: SPDR S&P 500 ETF (NYSE:SPY), ProShares UltraShort S&P500 (ETF) (NYSE:SDS)

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