Tags: Big | Speculators | Bearish

Big Speculators Bearish Despite October Surprise

By    |   Tuesday, 01 Nov 2011 09:52 AM

The month of October has been one of the best in history for the S&P 500. When all was said and done, the S&P gained 10.77 percent for the month.

This is the first double-digit percentage monthly gain for the S&P since December 1991, and the eighth best monthly gain since the index was started in 1950.

Despite the strong performance for stocks, the Commitment of Traders report for October 25 shows that large speculators are quite bearish.

The group has built the biggest net short position in the past year with almost 383,000 shorted.

The rally throughout October has caused overbought conditions on the majority of stocks based on the daily overbought/oversold indicators.

This could lead to some selling over the short–term, but if the overbought conditions can be corrected with a few days of selling, the large speculators may start unwinding the bearish positions.

With this level of pessimism, it could take several months to unwind and could lead to strong performances for the S&P in November and December. This will be something to watch in the next few weeks.

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The month of October has been one of the best in history for the S P 500. When all was said and done, the S P gained 10.77 percent for the month. This is the first double-digit percentage monthly gain for the S P since December 1991, and the eighth best monthly gain since...
Big,Speculators,Bearish
182
2011-52-01
Tuesday, 01 Nov 2011 09:52 AM
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